I recently read an article from American Home Shield about the Top 10 Mortgage Mistakes buyers make. The article made several good points, but what stood out the most to me were that several of the list's mistakes where ones that first time homebuyers make. I call these "Rookie Mistakes."
Rookie Mistake #1: Looking for a home before you're preapproved.
You should never start looking for homes before you are pre-approved. Primarily because you may very well be looking in the wrong price range which can easily set you up for disappointment is you are not preapproved.
Rookie Mistake #2: Avoid verbal agreements and ask for everything in writing.
Even if you verbally come to an agreement with the buyer or seller, always make sure the agreement is part of your contract or in some form of writing. Be sure that both parties have signed the written agreement.
Rookie Mistake #3: Don’t just look for the lowest rate.
You’ll want to consider the APR, origination fees and discount points from all potential lenders. Not all fees are broken out or outright disclosed – don’t hesitate to ask for a full breakdown of the numbers. Do your research by asking friends and family for recommendations, look for customer reviews online and meet with a few different lenders before you make your choice.
Rookie Mistake #4: When you lock in at the rate you agreed upon, get it in writing.
Obtain a written document detailing your interest rate, the length of your rate lock and any details like discount points, etc. Make sure you and your lender have seen and signed this document. 6. Know what you REALLY afford. You know what you can and can’t afford on a monthly basis. Setting a price limit and calculated budget help you determine exactly where your money goes, how you can cut costs and what you can truly afford to pay for a home. It’s not just a mortgage payment, you’ll want to include property taxes, insurance, potential homeowners dues and utilities. Don’t go borrowing what a lender is willing to lend you – stick a healthy, affordable price.
Rookie Mistake #5: Always have a professional home inspection.
Even if you’re buying a new home with a warranty, it’s still a good idea to have a 3rd party inspect your home. An independent inspector can help put together a report that may help you with negotiating. You’ll certainly know more about what you’re purchasing and getting yourself into before signing on the dotted line.
Rookie Mistake #6: Shop around for homeowners insurance. You could save a few hundred dollars when you shop around for homeowners insurance. If you haven’t already, you can combine policies and often receive discounts for multiple policies.
If you would like more information on the right way to handle your first time home, please give me a call at 281-412-2022. I have over 15 years experience in the Pearland real estate market and I'd love to be your Realtor!
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