Are you thinking about buying your first home in Albuquerque? If so, there’s a great deal of things to consider. But don’t let that intimidate you. Many first time buyers make the same mistakes, but if you learn from what they did or didn’t do, you can avoid making them. Here’s a few major mistakes that first time home buyers make and what you can do to avoid doing the same thing.
Picking Out a House Before the Mortgage
The very first step in buying a home is making sure you have the financing for it. If you can’t find the right mortgage, there’s no point in picking out a home. Many first time buyers tend to start looking at homes first because it’s more fun than talking about money. The problem is that when they find their “dream home”, then if they can’t get the financing, they’re disappointed because they can’t afford the home.
To avoid this, talk to a lender and at least get pre-qualified for a loan, or even better, pre-approved before you start looking at homes. This makes everything go much more smoothly, for both you and the seller. You know how much you can offer on a home and what price range you can afford.
Not Looking at First Time Buyer Programs
Usually first time buyers don’t have as much money saved for their down payment and closing costs. This leads many people to the conclusion that they have to wait to buy a home until they have a huge down payment.
You can avoid this mistake by talking to a lender about programs such as Veterans Administration or U.S. Department of Agriculture loans that don’t require a down payment. You may also qualify for a Federal Housing Administration loan that only need a down payment of 3.5%. Even some conventional loans have down payments as low as 3%. You never know until you ask.
Draining Your Savings
Most first time buyers need to buy older homes, as they obviously cost less. But that means there may be repairs to be made down the road, or perhaps right away. If you don’t have enough in your savings to cover these costs, it could end up putting you in a financial hole.
Make sure you save enough to not only cover the down payment and closing costs, but enough to take care of repairs that may come up later. This can be easier if you have a lower down payment.
Not Having the Home Inspected
Buying a home without having it inspected can be a huge mistake. You have no idea what hidden damage there can be in a home without an inspection. Some buyers feel that if they waive the inspection that it will give them an edge on other buyers. But if you end up buying a home that needs major repairs, it ends up being a bad deal anyways.
The simple solution is to hire a home inspector of your own choosing. This way they won’t have any bias toward the home seller or your agent, and can give you an honest assessment.
Buying your first home can be a positive experience if you take the time and make wise decisions with the future in mind. Check back on our blog every week for more real estate advice and local articles about living in Albuquerque.