Buying a home can be a very exciting experience but when you start on your home buying journey, you’ll want to do some research and ask lots of questions from experienced professionals. One thing that many people don’t fully research before talking to a lender is how credit is used to determine your mortgage and interest rates. Here are some basic mistakes to avoid to make the process as simple as possible.
1. Know Your Limits
This in regard to your finances as well as the upkeep and maintenance of your home. You want to take into account the cost of owning your home day in and day out. That doesn’t just meant managing your budget for your mortgage; that also means you will need to take care of the yard if you have one but other routine fixes will also be your responsibility if you were used to having a super or landlord take care of those situations. Not only will you be responsible for the physical fixes to your home, but you will also have to account for property taxes and HOA fees if they happen to be in your area.
2. Not Doing Enough Research
It’s always a good idea to do your research and shop around when making a large purchase and since buying a home is pretty much the largest purchase in many people’s lives, it goes without saying, you’ll want to explore your options before deciding on a home. If you are a first time home owner, you’ll want to make sure you are working within your financial limitations but also accounting for the future. Check property values in the area to see if they have appreciated or depreciated over time so that you know what kind of investment you are making.
3. Not Using A Realtor
Many people think that with the internet they have all the information they need to buy a home so they want to save money and skip using a realtor. Now up front this may seem like it’s saving you money, but it can cost you money and hurt your credit in the long run. If you are working wit a lender who does not have the expertise that a realtor has, they may push you into a financial obligation on a home that turns out being not what you need or extremely high closing costs that a realtor can help you avoid.
4. Not Shopping Around
When it comes to lenders whether they are private or government-backed, you definitely want to discuss your options with a few different companies. If you have friends or family, they may be able to give you a recommendation which is always good to get an opinion from a trusted source. If you have been a long-term customer of your own bank, your loyalty will often mean you will get a good rate but that doesn’t mean you shouldn’t explore all options.
5. The biggest mistake many first time home buyers make is applying for a mortgage before doing a thorough review of their credit score. Often times minor errors can make a pretty large impact to your credit score so it’s important to dispute any errors and pay down your balances as much as possible Your debt to income ratio is one of the ways the amount and rate your mortgage is calculated so having as little debt as possible should be a major focus when considering to buy a home.
Contact Us Today!
The home buying process can be a lot to handle and the experts at Family First Mortgage understand that and want to make sure you have the best information possible, There’s plenty of mistakes that home buyers make and we want to help you avoid them so don’t hesitate to reach out today!