January 29, 2021 at 10:23am | Michael Hunter
As a first time home buyer, it can be confusing know what to do and how to do it properly. The good news it, the mistakes are common and easy to avoid!

1. Find out how much you can afford
Being a first time buyer is exciting and can be rushed from it. Don't forget to figure out how much house you can actually afford. This saves you from wasting time looking at houses you can't afford or that are lower than your price level!
Talk to your bank to get the estimated loan you will be approved for. You can also use a mortgage affordability calculator! Do not go house shopping before figuring out any financial factors!

2. Credit Scores
Before asking about loans and getting started on looking for houses, double check your credit and fix any errors made. This will come in handy when a mortgage lender is looking to set an interest rate; if errors are not corrected, you may receive a higher interest rate than you deserve.

3. Down Payments
Some loans don't require a down payment or they require a small 3.5% down. This can be a good idea, though may end in regret. Make sure your down payment secures an affordable monthly payment, so go big with it! A bigger down payment will allow a smaller mortgage. The only thing is taking the time to save up the money, which can be done while trying to determine how much you can afford (step 1)!

4. First-time home buyers programs
If you don't have much saved up for a down payment and closing costs, check out some programs to help first time home buyers! There are plenty of low-down-payment loan programs, even state programs that offer assistance and competitive mortgage rates! Ask your mortgage lender about your first time home buyer options!

5. Any unexpected costs

A lot of first time buyers buy a previously owned house that may require some fixing up not long after purchasing. To avoid emptying your savings account when an unexpected event happens, save enough money for the down payment, ask how much the closing costs and moving expenses will be, and save extra incase of repairs that may come up.

6. Applying for credit 

The period between applying for mortgage and closing is critical. LEAVE YOUR CREDIT ALONE DURING THIS TIME. Don't get a new credit card or make any purchases using your credit card (no new furniture for the new house!). Wait until closing to do anything to your credit to avoid lower your credit score which will then mess with your mortgage rate.

These are just a few common mistakes made by first time buyers and ways to avoid them.
For more information, visit us at www.BuyingAndSellingMD.com



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