Buying your first home is an exciting time. It can also be confusing. Some first-time homebuyers make rushed decisions because they’re excited, or they become overwhelmed with all the new concepts and big decisions. Unfortunately for these first-time homebuyers, they may make some mistakes while they’re caught up in the whirlwind that is buying their first Minnesota home. Lucky for you first-time homebuyers in Minnesota, Ted Bougie and the Best Advantage Mortgage team are here to help you avoid these home-buying pitfalls.
What Are Some of the Common Mistakes First Time Homebuyers Make?
Our team has witnessed a few common mistakes first-time homebuyers make before they come to us for our help. We’ve done you the favor of outlining the top five mistakes you should avoid when buying your first home, so you can feel confident when you’re going through your home-buying journey! Plus, if you work with us, you’re guaranteed to cross all your Ts and dot all your Is in the first go.
House hunting before you’ve applied for a mortgage. This is arguably the cardinal sin of home buying. We know, we know, it’s so exciting to start looking online or attending open houses before you get your ducks in a row. Don’t do it! You’ll potentially find something you love, but no seller is going to take your offer seriously if you can’t even prove you’re able to pay.
Overlooking loan options. First-time homebuyers may think they don’t need our expertise to choose which loan is right for them. But that’s where they’re wrong. Unless you’re in the business, you may not realize loan options right under your nose. We’ve discussed in the past options like VA loans, FHA loans and USDA loans. Though they all have certain criteria you have to meet, it’s no use being eligible if you don’t even know about them!
Getting the wrong kind of mortgage. Picking your loan terms is not like picking a rabbit out of a hat (although that’d be pretty cool). It’s important to know your options and weigh the pros and cons of each. The Best Advantage Mortgage can help you determine which mortgage is right for you, explain terms and interest rates, and more.
Making decisions based on emotion. Similar to mistake #1, it’s easy to get attached to one of the first homes you look at, but you can’t let emotions weigh more than the facts. Don’t overlook the small print just because you found a home with a good vibe. This is one of the biggest choices you’re going to make, so don’t rush.
Buying a house out of your budget. Just because the bank has approved a loan for more than you were expecting does not mean you SHOULD spend more because you can. If you buy a home that empties your savings, you’ll be at risk of running into financial problems that could lead to foreclosure. So let’s avoid this one!
Common Questions We Get From First-Time Homebuyers
Can first-time homebuyers avoid down payment?
Yes. Some first-time homebuyers opt to not put any money down when buying a home and only pay for the closing costs. Though this is possible with loans like the FHA loan, it will require you to pay for private mortgage insurance (PMI). It will also increase your mortgage payments and interest rate.
Is the first time homebuyer incentive worth it?
Each state offers first-time homebuyer tax incentives or programs. These can include grants, lower interest loans, closing cost assistance, and more. You can also look into special programs based on your occupation, if you’re for example, in healthcare, a teacher or a firefighter.
Though some first-time homebuyers will not qualify for incentives, it’s important to check either way. You could be saving thousands of dollars if you’re eligible!
Let Ted Bougie & the BAM Team Help You Avoid Mistakes That First Time Home Buyers Make
With the BAM team on your side, you’ll feel confident in your first home-buying experience. We ensure you have all the tools you need when applying for mortgage loans and getting the best deal for your situation. Contact us today to learn more!
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