1. Not Checking Your Credit Score Early
Your credit score plays a huge role in getting approved for a mortgage and securing a good interest rate. Many buyers don’t check their credit until they apply, only to find errors or a lower score than expected.
Avoid this mistake: Check your credit score months before buying a home. If it needs improvement, pay down debts, make payments on time, and avoid opening new credit lines.
2. Not Getting Pre-Approved for a Mortgage
Many first-time buyers start home shopping without knowing how much they can afford. Without a pre-approval, you could fall in love with a home that’s out of your budget or miss out on a great deal because you weren’t ready to make an offer.
Avoid this mistake: Get pre-approved before house hunting. This will give you a clear budget and make your offer more competitive.
3. Underestimating the True Costs of Homeownership
Owning a home is more than just making a mortgage payment. Property taxes, insurance, maintenance, and unexpected repairs can add up quickly.
Avoid this mistake: Factor in all homeownership costs when budgeting. A good rule of thumb is to set aside 1-2% of your home’s value each year for maintenance.
4. Draining Your Savings for the Down Payment
While putting more money down can lower your mortgage payment, emptying your savings account can leave you vulnerable to unexpected expenses.
Avoid this mistake: Keep an emergency fund separate from your down payment. Ideally, you should have at least three to six months’ worth of expenses saved up.
5. Making Big Purchases Before Closing
Buying furniture or a new car before closing might seem tempting, but large purchases can affect your credit and debt-to-income ratio, jeopardizing your mortgage approval.
Avoid this mistake: Wait until after closing to make major purchases. Lenders check your financial status up until the final approval.
6. Not Shopping Around for a Mortgage
Many buyers go with the first lender they talk to, missing out on better rates or loan terms.
Avoid this mistake: Compare loan offers from multiple lenders to find the best interest rate and loan terms for your situation.
7. Skipping the Home Inspection
Some buyers waive the home inspection to make their offer more competitive, but this can lead to costly surprises down the road.
Avoid this mistake: Always get a professional home inspection to uncover potential issues before buying.
Final Thoughts
Buying a home is one of the biggest financial decisions you’ll ever make. Avoiding these common mistakes can save you money and stress in the long run. Do your research, work with trusted professionals, and don’t rush the process.
Are you thinking about buying your first home? Let’s talk and make sure you’re prepared for the journey ahead!
