It’s both exciting and a little scary to buy your first or next home. That feeling of nervousness and not knowing what to expect is normal!  

But, what you don’t want to rely on during this process is luck or chance. 

Most buyers feel “lucky”, but it comes down to much more than luck.  It takes an intentional strategy from start to finish if you want to find the right home for you, especially this year with home inventory at 40 year lows.

You can still wear green and keep that 4-leaf clover or rabbits foot in your pocket as a buyer if that makes you feel better, but as the saying goes, don’t press your luck. Make sure you steer clear of these 6 mistakes: 

Mistake #1

Not knowing how much you can afford. Think MONTHLY PAYMENTS first and foremost, not just the purchase price. Interest rates have not yet stabilized, so have a thorough understanding of what your estimated monthly payment will be.  Working with a great lender is the secret to understanding your monthly payment.  Next, get pre-approved by a lender BEFORE you start looking at homes. They may approve you for more than you are comfortable spending per month.  Know that you don’t have to max out your purchasing power, but you should set limits based on the monthly payment you are comfortable with,  *not the highest approved purchase price.

Make sure you understand the correlation between your purchase price, monthly payments and down payment required. This is different for every home buyer. Also factor in utilities, repairs and seasonal maintenance.

Mistake #2

Not realizing that the wrong type of mortgage can cost thousands of dollars of needless interest. You might qualify for an FHA mortgage, but you have HUGE monthly mortgage insurance premiums that drive up your monthly payments. Plus, there are some great loan programs available right now that can save you hundreds of dollars a month. 

For example, a 5% down loan where you don’t pay any private mortgage insurance.  There are all sorts of loan options available these days and the “right” one is based on your particular financial situation and how long you plan to own your home.  One loan definitely does not fit all, so do your homework and know the options and what is the right choice for you!

Mistake #3

Not discovering hidden defects before you buy a home. Never buy a home without a professional home inspection. But even before you reach that point, YOU need to know what the potential problems are in the home. From the get-go, have your agent request answers to questions such as: How old is the heating and air conditioning system? When was the roof last replaced? 

Often there are warning signs such as water damage that the seller doesn’t necessarily need to disclose, but you can see when you are looking at the home more closely.

Mistake #4

Not knowing how much your credit can affect your ability to buy a home. Lenders are tougher now and you need to have a decent credit score to get a low interest rate. About 3 – 6 months before you want to buy a home, start monitoring your credit online. You can go to websites such as www.myfico.com and pull your own credit for free. Do this very early on, before you start looking at homes, so you don’t have any surprises. 

Most credit issues can be repaired but it can take a few months, so if you aren’t monitoring your credit on a regular basis, check it early on in the process.

Mistake #5

Not knowing about all the great first-time buyer programs out there from state and local agencies. Don’t make this mistake! Many of these programs are only for first-time homebuyers and you don’t want to miss out of this opportunity. You can reap HUGE savings! There are down payment assistance grants and zero percent interest loans. There are even programs and lenders that have special loans for doctors and educators.  I can help you with these programs and determine if you qualify for them.

Mistake #6

Not asking questions if you’re confused or need clarification. There are no stupid questions when you are making the biggest purchase of your life. Don’t hesitate to ask any questions! I’m here to help you along the way and can educate you on the process from start to finish.

You’re In Luck!

I hope you enjoyed my silly attempt at making buying a home tie into St. Patty’s Day.  

In all seriousness though, you’ve got to be one step ahead when it comes time to finding your first home or next home in this market.  

Success in home buying this year especially will come down to planning and prepping WELL before you want to make a move.  Together, we’ll make a plan that works for you and your timeline and then put it into action when you say GO!