Top 5 mistakes when buying your first home to avoid

Anxiety: That's the word most first-time homebuyers identify with. There are so many tasks to complete. It's completely "feeling overwhelmed" in fear of making a few mistakes when buying your first home.

However, you must be careful not to fall into some of the more common traps that first-time buyers often fall into. Once you know these main mistakes when someone buys their first home, you will know how to avoid them and make your journey to buying your new home more smooth and satisfying.

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Mistake # 1: Not Understanding Your Down Payment Options

The initial payment is usually the process that generates the most losses among new buyers. You'll know what I'm talking about if you've ever bought a car - the down payment is what contributes to the total cost of the purchase.

It may only be a small amount of money, but if you don't have a certain amount to put on your home loan, you will likely have to pay for private mortgage insurance (PMI) for the life of the loan. Depending on your credit score, entity and other variables, the PMI could be between 0,5% and 1% of the total loan amount.

Almost all banks require at least a down payment of about 20% before giving up the need for PMI on the loan. In other words, if houses in an area cost around $ 300,000, this means that you should have around $ 60,000 to avoid the PMI.

On the other hand, there are also some loans available that allow you to deposit as little as 3% on the property (which is equal to $ 9,000 for a $ 300,000 home), which makes it much more convenient for first-time buyers to face your first payment.

Additionally, you should also know that certain government organizations and lenders tend to incentivize first-time homeownership by offering free down payment grants or loans to qualified buyers. Your age, income level, credit score, and other factors will be taken into account to receive free money for your down payment.

Mistake # 2: Not Getting Prequalified for a Loan

Keep in mind that between the amount of money for your new property deposit, the potential PMI, and other cost variables, the monthly investment could be significantly higher (or lower) than some online calculators will show you. This is usually one of the worst mistakes when buying your first home that you can make.

Given this, the best thing you can do is apply for prequalification for a home loan.

This way, you'll have to speak to a mortgage loan officer and submit a large amount of documentation - this includes everything from your monthly pay stub to your credit score. That way, the loan officer can estimate the amount of money you could repay. The prequalification letter you get as a result is a more reliable rating you can get, so sellers will take you more seriously when it's time to negotiate an offer.

Keep the following in mind: a bank could approve you for any loan amount, realistically more debt than you can have month to month. Remember, you will have to pay for homeowners insurance, taxes and flood insurance on your new property or PMI on your loan. Try to make sure you are not preparing a total monthly payment of more than a third of your home's take-home pay and don't make the typical mistakes when buying your first home.

This in addition to helping you establish your price range for the search stage, will also give you the confidence you need to successfully purchase a Miami home.

Mistake # 3: Not having the help of a qualified real estate professional

Surely you think that being able to find homes online, a real estate expert may be unnecessary. At the end of the day, the difficult part is finding the place you want to buy and that you can do it yourself… right?

Well, that may be true. But the home buying and selling process is packed with hundreds of requirements that must be planned and geared towards meeting your expectations. So there are areas with competitive markets where you may not be able to see the most up-to-date listings; That house you fell in love with online could be under contract before you can schedule a time to visit.

An experienced real estate professional can provide you with access to listings the moment you log into MLS. A real estate expert is necessary to avoid mistakes when buying your first home. This experience can only be offered to you by a licensed real estate professional, who will find with you the best area where you deserve to move. Additionally, it will guide you through some of the challenges of owning a home in that particular area. Working with an honest professional is the best way to protect your interests.

An expert in real estate investment is a resource that you need yes or yes.

Essential questions to find the perfect real estate agent

When selecting your real estate professional, make it a priority to answer the following questions:

  • What can you tell me about the energy options in the area?
  • What else do I need to know about utilities like water / sewer and other services?
  • How long have you sold real estate?
  • What do other clients who have moved here like about the area? What is it they don't like?
  • How long have you sold real estate in this particular neighborhood?
  • What do people in this area like to do for fun? What are some popular weekend activities?
  • What can I expect from the purchase process? What steps should I especially take into account and how will we keep in touch?

A real estate professional who is an expert in the area should have no problem answering lifestyle questions, and a real estate professional who is an expert in transaction management can help you understand exactly what to expect. how long it will take and what rewards await you at the end of the tunnel.

Mistake # 4: Not spending a day in the neighborhood

The key to making a good real estate investment is to try out your new neighborhood beforehand. Many shoppers host a night or two in the area (some as long as a week) to understand exactly what to expect from that neighborhood.

This gives the opportunity to start living the experience in that area: know how public transport works, the location of grocery stores, parks, recreation centers, hiking trails ... More experienced buyers need to know where they will go shopping! and they will exercise. They also find out how they can spend time outdoors or enjoying nature.

This method is infallible to avoid misunderstandings when you realize that what you really value is not available.

Another important point to avoid mistakes when buying your first home: noise levels at night. It is crucial to consider if there is a train passing through the city in the early hours of the morning, if it is close to the road or a flight path. Invest in spending a few nights in your potential new home and avoid unpleasant and unexpected noises.

This gives you what it takes to understand how far away your home is and to guide your home search accordingly.

Mistake # 5: Not understanding what can and cannot be fixed

Are there problems that can be fixed or are they a deciding factor that involves starting a new search for another property?

A real estate agent is also helpful at this point. They have so much experience that they can point you directly to which houses with the number of bathrooms you need or let you know if the ceilings are too low for a change to make a difference. It can also give you an idea of ​​what is happening in the area. Helps you glimpse what is acceptable. And what not.

A real estate expert will help you make a decision with confidence on the go.

While none of these mistakes are going to stop you from buying a new home, they could still delay the process and cost you hundreds (if not thousands) of dollars at the end of the transaction. Now you can avoid these mistakes when buying your first home. You will have the home of your dreams before you know it.