No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.
1. Save as early as you can: Even if you think you’re years away from buying your first home, try to start saving for your down payment. I know it’s hard with how high rents are right now, but it makes a huge difference in your monthly payments, and helps avoid paying Private Mortgage Insurance (which also makes your closing costs and monthly payment higher).
2. Be thorough with mortgage shopping: There are countless resources out there that can help you get the best terms for your mortgage. It may seem like a lot of work to shave less than a point off your mortgage rate, but it’ll save you thousands in the long run. Also make sure that you feel a trusting connection with your lender and that they’ll answer calls and write up pre qualification letters for you on the weekend!
3. Look with open eyes: You’re likely to fall in love with a home, and that can make it difficult to take problems seriously. Make sure your realtor points out the good and bad about a home. While there’re not a professional inspector, they can often catch a lot of potential problems that will need to be looked at. Also bring someone along for an outside opinion too. They tend to be less emotional about the purchase and can see a property for what it really is.
4. Be patient with getting settled: You’ll be anxious to make your new home your own, but take some time to see how your budget truly shakes out. In other words, hold off on big furniture purchases and remodeling projects especially before closing. Making big purchases (with cash or credit) while you’re in escrow can effect you getting qualified for your loan, make sure to chat with your loan officer before any big purchase!
5. Make sure you’re happy with the neighborhood: Location, location, location! The house may be perfect, but don’t discount the surroundings. You don’t want to end up in the suburbs if you’re going to miss walking to your favorite coffee shop, and you don’t want to settle for the city if you’re looking forward to some peace and quiet. Some suggestions I have are drive down the street on a Friday or Saturday night. Is it quiet or are your neighbors really partying? Also chat with your neighbors about the area. Nothing wrong with knocking on their door and chatting about any concerns you have. I was worried about railroad noise for my house, so I asked a neighbor about it and turned out it was no big deal. Last check out crime statistic maps and sex offender maps if that is something important to you!