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Top 5 First Time Home Buyer MistakesIf you're a first time home buyer and you're preparing for a home purchase, you are embarking on a journey that will likely be hugely rewarding in the long run. Homeownership offers a number of benefits that can improve your life both personally and financially. But be warned. There are many potholes in the road to homeownership, and if you're not careful you may hit a few and wind up in a potentially harmful situation. Watch out for the following five common first time home buyer mistakes. 1. It's a mistake to buy a home because you like it. This may sound counterintuitive, but it's the most common pitfall. You've never owned a home before, and your real estate agent is showing you all the cutest houses in the neighborhood. You're bound to fall in love with one of them. And love is blind. You need to keep your head about you. Don't let emotional and the simple fact that you like a particular house distract you from the other important steps in the process. 2. It's a mistake to assume your income will increase to accommodate your new living situation. Does anyone really think this way? You would be surprised how many homebuyers buy homes they can't afford and assume that if they can just deal with high mortgage payments for the first year or two, they'll be sitting pretty for the remainder of the loan term. This may happen. You may get a raise or a new job. But far too many homeowners have fallen on hard times due to overspending with the assumption that future income will increase. 3. It's a mistake to take the first mortgage you're offered. There is almost never a situation in which the first mortgage offer you receive is the one you should take. The only time this might be advisable is if you've got a narrow window in which to purchase the home you need, and a situation like this could only arise if you've made other mistakes. See the next one, preapproval, for more info on how this might happen. But regardless of your situation, you need to do some research and get multiple quotes before you decide. Make sure you compare mortgage rates and find the best deal. 4. It's a mistake to not get preapproved. We can't stress preapproval enough. Just do it. Don't wait until you're halfway through buying price negotiations to find out whether or not you qualify for a loan at all. Get approval from your lender for the amount you can afford before you even start looking for homes. 5. It's a mistake to buy a home when you're not ready. How is your credit score? How is your employment situation? Do you want to live in your current location for the next five to seven years? Make sure you're absolutely ready to buy a home before you take the plunge. If you're not, take the time to prepare so that you are ready. If you are, go for it! |
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