In the United States, there were about 1,782,500 first-time homebuyers. While buying a home is an exciting prospect, it can be easy to make mistakes during the home-buying process. Learning more about these mistakes can help you avoid them to ensure a smoother transition to homeownership.
Do you want to learn more about the common mistakes you need to avoid when you buy a home?
Keep reading this mortgage broker guide from a Milton mortgage company for everything you need to know about buying a home.
Failing to Get Pre-Approved
One of the most important things you can do when buying a home is to get pre-approved by a local lender. Getting preapproved confirms your creditworthiness and can greatly speed up the process of closing on a house when you are ready to purchase a home.
When you get preapproved, you can complete a mortgage application and a credit check. Then, you will get approved for a specific loan amount from your lender.
This is essential, as it will help you understand how much you can afford to spend on a house.
Purchasing a House You Can’t Afford
Although a home is one of the biggest purchases you may ever make, it is easy to purchase a house that you cannot afford. You need to make sure that you are only looking at homes with a mortgage that you can afford.
Many people will spend their entire budget or empty their savings accounts when they purchase a home. Even though your lender may approve your loan, that doesn’t mean that you should take the maximum amount that they will let you borrow.
Instead, it is best to follow the 30% rule. This means that you should not spend more than 30% of your gross income on your monthly mortgage payment.
Not Understanding the Cost of Owning a Home
Not only do you need to consider the price of the home you are buying, but you also need to understand the cost of homeownership. If you have never purchased a home before, you may think that you will only have to pay your monthly mortgage and utility bills.
However, there are many additional monthly costs that you need to consider when buying a home.
For example, you will be financially responsible for property taxes, homeowners insurance, HOA fees, and even the cost of repairs and maintenance. This doesn’t even take into account the additional costs of buying a home, like appraisal fees, closing costs, and more.
It is essential that you know about each of these costs and are financially prepared to pay them when you buy a home.
Not Shopping Around for a Mortgage
Something that many homeowners may not understand is that you can shop around for mortgages. Too often, people looking to buy a house will use a lender that was recommended to them and end up with a mortgage that does not fit their needs.
Instead, you should research different lenders to find one that will work with you.
One thing that can help is finding a Milton mortgage broker! What is a mortgage broker? It is someone that acts as a middleman between you and different lenders.
This makes it easier for you to find loans that have the best terms and rates.
Shopping around for the best mortgage is one of the most important mortgage broker tips you can follow when you are buying a home.
Failing to Get an Inspection
Failing to get an inspection is a serious mistake that many home buyers make. An inspection is often necessary to help you learn about the condition of the property.
It can make you aware of the problems with a property, the repairs that will need to be done, and more.
If you don’t get an inspection, you may end up purchasing a home that will cost much more than your initial mortgage payment.
Applying for New Credit
When you are buying a home, you should never apply for new credit before the closing process is complete. This is one of the worst things you can do, as it can affect your credit score and may result in the deal falling through.
When you take on new credit, you are taking on more debt. If this happens, your mortgage officer may think that you are an unreliable borrower and you may not get approved for your loan.
Instead, you should always wait until the sale of your home is finalized before taking on new credit, whether you are buying a new car, new furniture, or anything else.
Not Looking at Programs for First-Time Buyers
Finally, failing to look at programs for first-time home buyers is a mistake that can cost you thousands of dollars! As a first-time home buyer, you may not have a lot of money saved up to cover the cost of a downpayment and closing costs.
However, there are many programs that will offer you assistance for down payments or will offer more competitive mortgage rates if you are purchasing a home for the first time.
You can learn more about these programs by talking to your mortgage broker or lender.
Buying a Home? Apply for a Milton Mortgage Today
When you buy a home, there are many mistakes that can slow down the process. Learning more about these mistakes and how to avoid them can make buying a home a simple and stress-free process.
If you want to start the home-buying process and are looking for the best mortgage broker, finding a Milton mortgage can help! Mortgage Winners can help you build a tailored mortgage solution to meet your needs.
Contact us today to speak with a mortgage pro and to learn more about buying a home in Ontario, Canada.