5 Slip-ups for First-Time Homebuyers to Avoid

5 Slip-ups for First-Time Homebuyers to Avoid

The market can be intimidating for first-time homebuyers. You have a lot on your plate, which means you may end up giving too much attention to certain things and not enough to others. 

No problem, we’re here to help. Here are five slip-ups to avoid as a first-time homebuyer. 

Don’t Get Too Attached to a Home

This is a tough one, but it’s essential. In a market that has been called “the mother of seller’s markets,” you can’t get too attached to a home on the market before you actually close on the sale. 

Why not? Because things don’t always work out. You may submit a great offer at the top of your price range but find out someone has outbid you. Or there may be significant issues with the home, leading you to choose between walking away or paying an arm and a leg to fix the problems. 

This can be a hard thing to do, but it’s essential. Once you get into the home, yes – feel free to fall in love! But be wary of doing so until you get in. 

Don’t Buy a Home that’s Too Expensive

This is another one that’s very tempting to do – especially in today’s market. 

Interest rates are going up – and reports suggest that we may get six more interest rate hikes. However, many people are trying to buy now while rates remain low, so their monthly payments are manageable. 

It’s great to buy a home now to get in before the rates climb much higher, but be careful that you don’t bite off more than you can chew. Generally, we consider it safe to buy a home that’s 2-2.5 times your annual household income. So if you and your partner earn $150,000 a year combined, then a safe home value would be between $300,000 and $425,000. 

We wrote a whole article on how to estimate monthly mortgage payments. It’s a great resource if you have any questions. 

Avoid a Slip-Up By Buying Something Big on Credit

When you’re in the market for a home, you want to avoid doing anything that will negatively impact your credit score. A few examples include buying a car, taking out a huge student loan, or racking up your credit card debt. 

These things can hurt your credit score, which you want to be as high as possible because a high credit score will get you the best type of mortgage from a broker or lender. 

You work hard to save money for your downpayment and increase your credit score. Don’t mess up when you’re at the finish line by taking on a great deal of debt or missing a few bills.

Don’t Switch Jobs

Lenders and brokers like to see a solid employment history. The number typically thrown around is at least two years in a job. It has proven to be a stable source of income for you at that point. Since they want to make sure you can pay your mortgage every month, your income source is exceptionally crucial to the lender. 

If at all possible, suspend your job search for a few months! People have dubbed the last few years as “The Great Resignation,” but now is not the time to move on if you’re trying to buy a house. 

You Need a Home Inspection

Having a home inspection is an integral part of the process. We always encourage our first-time homebuyers to get one. 

It doesn’t matter if you buy the home with cash or a mortgage. It doesn’t matter if it’s a small home or a big one. It doesn’t matter if it’s old or new. You need to spend a few hundred dollars to have a certified home inspector take a look. 

You don’t want to get into the home and find surprises! A home inspector can’t catch everything or prevent things from happening, but they are trained to look for problems. 

Conclusion

Do you have any questions about these slip-ups for first-time homebuyers or any other aspect of buying a home? No problem, we’re here to help. Call us at (949)-271-7802 or send us an email, and we’ll talk to you soon.