4 Common First-Time Homebuyer Mistakes to Avoid
Are you a first-time homebuyer? Then you’ll want to read this article. As a first-time homebuyer, it’s easy to make mistakes along the way. Everyone does. However, these mistakes can prove costly. If you’d like to avoid them, here are 4 common mistakes that first-time homebuyers make and how to avoid them.
Not Getting Pre-Approved
Before looking at homes, you should make sure you get pre-approved for a mortgage. Not only does the listing agent sometimes ask to see that you’re pre-approved before accepting offers, but you’ll also want it for your own peace of mind as well.
A home is most likely the single biggest purchase of your lifetime. But how can you look at homes without knowing how much you can afford? You wouldn’t want to make an offer on a home, only to find out that you don’t qualify for enough mortgage money to purchase it, and you’re left scrambling at the eleventh hour.
When you’re pre-approved, you know exactly how much you can afford to spend on time comfortably. Getting pre-approved through one of our mortgage experts is a no-brainer for anyone considering buying a home.
Not Having Your Deposit Easily Accessible
When making offers on homes, to make sure you’re serious, the home seller asks for a deposit. The size of the deposit depends on the neighbourhood and the type of home you’re buying. Your realtor can give you more insight into that.
Don’t make the common mistake of not having your deposit money ready. You want to be able to access your deposit money easily. You’ll typically need to make your deposit within 24 hours of the home offer being accepted. It’s best to keep the money in a chequing account rather than a savings account. You may earn a little less interest, but at least you won’t be left scrambling and trying to buy more time when you find out it’s going to take you three business days to move your money from your savings account.
Not Holding Back Money for Closing Costs
Besides the deposit and down payment, another sum of money you’ll need to have is to cover closing costs. Closing costs are the so-called hidden costs of real estate. Common closing costs include land transfer tax, real estate lawyer fees and home inspection fees.
Many first-time homebuyers assume that their mortgage lender will cover closing costs when that isn’t true. You’re responsible for saving the money yourself. Don’t make the common mistake of putting every penny towards your down payment; otherwise, you could be left scrambling to get a gift from relatives to cover closings costs if you weren’t prepared.
Being Too Picky with Homes
When you’re looking at homes, it’s important to be open-minded. I’m not saying that you should settle on a home that is missing something crucial like the number of bedrooms you need. However, if you have a list of 100 items that the home needs and you’re not willing to budge on any of them, you could be looking for a very long time.
It helps to have a list of top 5 home buying needs and top 5 wants. Those should be the most important things to you. Even then, you probably should consider a home that has 7 or 8 out of the 10 things you’re looking for, as finding the perfect home could take you years, and by then, you could be priced out of the market.
The Bottom Line
Do you have questions about anything else? Speak with our mortgage experts today. We’d be happy to help clarify anything you need help with to make the home buying experience more pleasant.