Buying your first home can be an intimidating process. Even if you have some idea of where to begin, you’ll no doubt need a little guidance as you begin this overwhelming, yet rewarding, period in your life. I’ve worked with countless first-time home buyers and have watched many of them make the same mistakes over and over again. I want to help make your first home buying experience as smooth as possible, so here are the mistakes many first-time home buyers make—and how you can avoid them.
#1. Not Knowing Credit Score Requirements
Many first-time homebuyers might be interested in qualifying for an FHA program, which requires a minimum credit score of 580. If you’re trying to repair your credit score and work towards 580, beware—many individual banks and mortgage agencies have requirements in addition to the federal requirements. Depending on where you go, many of these lenders may require a minimum credit score of 600 and 620. The difference between 580 and 620 is vast and can significantly delay your search if you’re unprepared. Research your lending options and what the minimum requirements are so you won’t be disappointed when you finally sit down to meet with your lender.
#2. Not Meeting with a Lender First
To make the process as smooth as possible, it’s ideal to meet with a lender before you start searching for your dream home. This will not only help you find the best mortgage program for you, it’ll make obtaining a pre-approval letter from your mortgage lender that much easier and your offers even stronger when you do find the house you want.
#3. Not Thoroughly Inspecting the House
Once you’ve found what seems like your dream house, you might become so blind-sided by the excitement of it all that you neglect to give the house a thorough inspection with your own eyes. You might follow the home inspector from room to room and think you’re asking the right questions, but ultimately you need to pay close attention to every aspect of the house. I highly recommend bringing in a close friend or family member (ideally someone who has gone through the process before also) to give you a second opinion and to notice things that you might not. A trusted friend or loved one will hopefully be honest with you about what they see. This could eventually save you major headaches in the long-term, especially if there’s something significantly wrong with the home that you didn’t notice at first.
#4. Making Huge Life Changes
After your offer has been accepted, you’ll have to wait almost a month for everything that goes on behind the scenes (application review, IRS checks, employment info, etc.) to come to fruition. Therefore, it’s incredibly important that you be patient and refrain from making any major life changes during this period, such as:
- Changing jobs
- Switching banks
- Making huge purchases (brand new furniture, a new car, etc.)
These kinds of life changes could compromise your debt-to-income ratio, which lenders utilize to make sure you’ll make your payments on time. Major life changes, especially financial ones, can wait until after you’ve closed on your new home. Otherwise, you could jeopardize getting the home at all.
Buying your first home is an exhilarating experience, but it can also be a stressful one that has significant long-term consequences. By being prepared and knowledgable, you can avoid the unfortunate mistakes so many first-time home buyers make and ensure a smooth and stress-free experience.