March 9, 2023

First-time Homebuyer Mistakes to Avoid

March 9, 2023

First-time Homebuyer Mistakes to Avoid

Avoid These Common Mistakes as a First-Time Homebuyer

Purchasing a home is a major financial decision, and as a first-time homebuyer, there are several pitfalls you need to avoid. Here are some of the most significant mistakes to steer clear of before buying your dream home.

  1. Failing to prepare in advance

To put yourself in a stronger position to apply for mortgage loans and make offers, experts suggest preparing a year in advance before buying a home for the first time. During this time, you should save up for a down payment, pay down debts, and repair any credit issues. Additionally, aim to have 3–6 months of emergency funds set aside after closing. Avoid sinking all your savings into buying a home.

  1. House-hunting without a mortgage pre-approval

Before viewing homes and making offers, it is crucial to obtain a fully underwritten pre-approval. Sellers want to see that your credit and finances meet the necessary requirements for the loan to go through. Failing to do so could result in the deal falling apart. Get in touch with a trusted lender to ensure you can get a loan and know what you can afford.

  1. Working with only one lender

Avoid making the costly mistake of going with the first lender you speak with. Meet with at least three different lenders to compare rates, lender fees, and loan terms. Making these comparisons will help you confidently select a loan officer and potentially save you thousands of dollars.

  1. Stretching your budget too thin

Buying a home that is above your means is a significant mistake that many first-time buyers make. Determine a realistic monthly mortgage based on your current income and financial obligations before choosing a home that will help you stay within this budget. Qualifying for the maximum loan amount doesn't mean you have to borrow the full amount.

  1. Overlooking hidden expenses

Purchasing a home involves more than just down payment and closing costs. There are several expenses associated with buying a home, including property taxes, maintenance, HOA dues, repairs, homeowners insurance, mortgage insurance, real estate attorney and more. Consulting with your financial advisor and buyer's agent before buying a home will help you prepare, save, and budget for all these expenses and avoid financial quicksand after closing.

  1. Not taking advantage of assistance programs

Many assistance programs and grants exist for first-time homebuyers. Educate yourself on different types of mortgage loans and take advantage of these programs to purchase your first home.

If you're planning to buy a home in The New Eastside, Chicago contact us at (312) 927-0852 to start your journey.

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New Eastside Living

Ginger Menne
737 N. Michigan Ave, Suite 1800
Chicago, IL 60611
Tel (312) 927-0852
Off (312) 216-5887
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