When you are about to buy a home for the first time then you will feel like a roller coaster of emotions as you will be feeling excited but at the same time will be nervous about the whole procedure as well. But on top of that, a feeling of being an achiever as you are about to buy your dream house. However, when you will find a suitable house from the MLS listing then you will have to go through several different procedures and work with real estate agents along with the sellers and lenders to make it come true. This is the time where you will have to think about every step ahead because several first times home buyers will do these mistakes that will end up with some serious financial consequences. From talking to real estate agents to finding the right property, w got you covered. Just continue to read the following.
Not Knowing How Much You Can Afford
You will find several houses for sale while browsing MLS listings and that could be quite tempting but not knowing how many houses you can afford will just be time-wasting. You may end up finding houses that are way out of your reach or you might be visiting houses that aren’t close to the price you pay for them. If this is your first time then you will need to make sure that you find a home that has affordable pricing and you would easily be able to pay the monthly payment that wouldn’t rip your wallet. There is no shame in admitting that you cannot afford “that home” and go for low-priced homes. You can use the mortgage affordability calculator available online to find out what is the most affordable price range for you and how much would be a stretch.
Not Correcting Errors in Credit Reports
When it is time to contact the mortgage lenders then you will need to provide your credit report as this will be a crucial thing for the mortgage lenders. Even before browsing MLS Strathroy, you will need to check your credit report for any financial errors. A minor error can end up having you a much higher interest rate than you deserve. This is why you should check your credit report every year when you have decided to buy a home. You can get your credit report free from three main credit bureaus and if there is any error that and to be rectified then you shouldn’t delay.
Settling On Just One Quote Rate
Just like any expansive item you are about to buy such as a car where you will browse several dealers before settling for the right pricing, the same should be happening with the mortgage rates as well. You should shop for the eight mortgage rates before settling for one by comparing each lender and do compare for the fees such as discount points and closing costs. What exactly happens is that almost half of the first-time home buyers will not browse different lenders. So, how can you avoid this mistake? Just apply to the multiple mortgage lenders. A general borrower can end up saving 435$ in interest only in the first year by comparing the lenders. The mortgage applications submitted within the 45-day window will consider as just one credit inquiry.
Ignoring Loan Programs
A number of first times Woodstock real estate buyers will have to pay a small down payment which in some cases crucial. However, not all of them are aware of the government programs that are helpful in minimizing their down payment cost from little to zero. There is several first time home buyer loan program. Such as:
- VA loans:
These are guaranteed by the U.S. Department of Veterans Affairs. This loan program is specifically designed for the people who have served in the military. VA loans for first-time buyers are the perfect loan for those who don’t want any markup on their loans and they can even get 100% financing. However, borrowers just have to pay a funding fee instead of mortgage insurance.
- USDA loans
These loans are perfect for those who want to buy homes in areas that are allotted by the rural U.S. Department of Agriculture. If one is qualified for the loan then he or she will be entitled to pay zero percent down and get 100% financing. The borrower will have to pay a guarantee fee and an annual fee instead of paying mortgage insurance.
- FHA Loans
With this loan program, you just have to pay as low as a 3.5% down payment. This loan program is perfect for those who don’t have a perfect credit history. However, with the FHA loan program, you will have to pay mortgage insurance till the life of the mortgage even when you have equity of more than 20%
Looking For Houses for Sale before Mortgage
Though it sounds great when you talk about the house you found in MLS listings than the finances with a lender. This is another major mistake that a huge number of first-time home buyers do. They visit properties before knowing how much they can borrow. They often fall for a price that is too high for them than they expected and get disappointed as they cannot make a serious offer because of lack of required financing. So what you will need to do is to talk to a mortgage professional qualifying for pre-qualified or even preapproved loans before browsing Woodstock real estate. Opting for a pre-qualified or preapproval process involves reviewing your expenses and income and this will allow you to make a solid bid and the seller will take serious consideration on your bid.
When you are considering buying a new home then you will need to make sure that you don’t perform the same mistakes that are often the case in this scenario. Once you have reviewed everything, browse our best MLS listing for better housing options.