7 Mistakes First-Time Homebuyers Should Avoid

Purchasing your first home and becoming a first-time homeowner is a significant milestone, and one that many look forward to with excitement and anticipation. But as great as it is to become a homeowner, the process can feel foreign and intimidating, and there are a number of mistakes that you should try to avoid. Are you looking for first-time home buyer tips? If you are dreaming of buying your very first home, steer clear of these common pitfalls:

1. Not preparing for additional costs. Paying for a home involves more than a mortgage payment. Set aside room in your budget for expenses like property taxes, homeowners insurance, HOA fees and lawn care. You should also have a cushion in your savings for home maintenance and repair. If you’re unsure of other expenses to anticipate, ask your realtor about other typical costs to homeowners in the area you are buying to help prepare.
    

2. Ignoring your credit score. Your credit score directly affects the interest rate you receive on a home loan. Improve your FICO^® Score* by paying off credit cards and collection accounts, making timely payments and avoiding new lines of credit. Find out more at myfico.com. Most loans require a minimum credit score of 620, but others need a higher credit score in order to qualify. Keep this in mind as you start house hunting.
    

3. Skipping prequalification. Kara Loftus, AVP Mortgage Sales at Mountain America Credit Union, recommends, “Get prequalified for your home loan first. This will help you know what you can afford before falling in love with a home outside of your budget. Generally, your monthly housing expenses should not be more than 28% of your income.” As fun as it can be to go straight for your dream home when buying for the first time, it would be more prudent to get an idea of what you can really afford to avoid potential heartbreak.
    

4. Using the seller’s realtor. Get an expert to advocate for you and guide you through inspection, contracts and negotiation. Using the seller’s agent may create a conflict of interest. Ask friends, family or your lender to recommend a realtor they trust. Having the right team of people helping you navigate the steps to buying a house for the first time will do wonders for giving you peace of mind and making things as seamless as possible.
    

5. Skipping the inspection. When you find the home of your dreams, you may be tempted to charge forward as quickly as possible, but skipping the home inspection can lead to costly problems later—like mold or a leaky roof. Take the time needed to properly inspect the home. If repairs are needed, talk to your realtor about which steps to take to get everything completed.
    

6. Taking out another loan before closing. Lenders will pull your credit right before closing to ensure your debt-to-income ratio has not changed since you were preapproved for the loan. If you finance a whole new set of furniture before closing, the contract may fall through. As exciting as it may be to make those fun purchases for your home, hold off until all the t's are crossed and the i's are dotted just to make sure there are no problems at closing.
    

7. Refusing to compromise. Sometimes, to stay in your price range, you may have to let go of some of your preferences and see the potential of an ugly-wallpapered duckling. Make a list of your must-haves and try to be flexible on the rest. Keep in mind that this is your first home—it's ok if it doesn't check off all the boxes. There will undoubtedly be opportunitites for you in the future when you can opt for a home that meets more of your preferences.

There is a lot to consider when buying your first home and we know that the process can seem overwhelming. Mountain America Credit Union is here to help. Our team of mortgage experts will guide you through the homebuying process, helping you to have an easy, worry-free experience. And, with our first-time homebuyer program, you won't have to make a huge down payment. Reach out to our team and get started on the process of becoming a first-time homeowner!