Most Common Mistakes First Time Homebuyers Make

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Buying a home for the first time can be nerve-wracking and rewarding. While people are always excited at the prospect of purchasing their first home, not everyone is prepared for the realities of home ownership, which can lead to problems down the road. While there are many complexities involved with purchasing your first home, a knowledgeable loan officer Las Vegas can help to ensure a smooth and successful outcome.

Do Your Research

One of the most common mistakes that new homeowners make is not doing enough research before buying their home. Although it may be tempting to jump on the home of your dreams, you’ll need to put some thought and consideration into buying your next home before making the final purchase. That means taking your personal finances and your family’s needs into consideration. As the popular saying goes, you are also buying a location when you buy your next home. Therefore, it’s worth your time and effort to get to know the neighborhood before you buy a home. If you need to travel to work or your kids need to attend school, you’ll want to take into account factors such as the commute or distance to the local schools. Public transportation, crime rates, and access to amenities such as shopping, parks, and nightlife may be other considerations you’ll want to keep in mind. (Read about the difference between a 15 and 30 year mortgage.)

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Get the Right Mortgage

Getting the right mortgage is also essential when you are buying a home. Ideally, you should have your loan pre-approved by a mortgage lender before you look for a house. Even before that, it makes sense to determine how much home you can afford to buy. Using a mortgage calculator is a great way to help make that determination. Keep in mind that the more you can pay for a down payment the better, as you’ll be considered less of a risk regardless to the lender. The conventional down payment amount for home loans Las Vegas is 20 percent, although some government-backed loans offer an even lower rate. If you do pay a down payment less than the standard amount, you’ll be viewed as a higher-risk borrower by a mortgage company Las Vegas, which might mean you end up paying more in interest over time. You may also be required to pay mortgage insurance to cover the lender in case you default on the loan.

Buy a Home You Can Afford

Spending beyond an allotted budget is a common mistake among new homeowners. Although it may be tempting to splurge on a home that’s a bit more than your ideal price range, doing so can lead to financial problems later on. Be aware that real estate agents may also try to persuade you to buy more home, as they will ultimately earn a higher commission. Banks impose borrowing limits for good reason, which is their assessment of your ability to pay off the loan. If you find yourself in a tight financial situation due to buying too much home, you may have trouble making your loan payments, which can result in defaulting on your loan.

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mortgages las vegas

Cheap Isn’t Necessarily Better

While overspending is not uncommon for new homeowners, some prospective homeowners have the opposite problem. Another common mistake is to buy a cheap property simply because it’s in your financial comfort zone. However, this is not a good solution either, as you can end up with a home that you are not happy with or one that has a number of problems and requires substantial improvements before you can live comfortably or offer the home for resale.

Know the Full Cost of a Home

Some new homeowners think that the price they see on a home’s “For Sale” sign is what they will pay, and they plan a budget accordingly. However, the full cost of a home includes additional fees that are not included in the initial price tag. Some of those added expenses may include:

  • Property taxes
  • Mortgage insurance
  • Homeowners insurance
  • Home Owners Association (HOA) fees
  • Maintenance and inspection costs
  • Utilities
  • Title search fees
  • Transfer taxes

Working with a knowledgeable real estate agent or loan officer Las Vegas is a good way to understand all the additional fees in your personal situation and plan your budget accordingly.

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Stop Waiting for the “Perfect” Home

When you’re shopping for a new home, it’s natural to question if the home that you have in mind is “the one.” While many people have a vision of what their dream home looks like or a list of features they want a home to have, the reality is that no home will score a perfect 10 on your criteria list. A good rule of thumb, industry experts say, is that if a home gets a score of 7 out of 10 on your ideal home checklist, you should seriously consider making an offer. Remember that you can always add on to a home, add a fresh coat of paint, or make other improvements later on that add on more of your wishlist items.

Get a Final Inspection

It can be easy to be wowed by a home’s shiny facade, but not everyone stops to look at what’s underneath the surface. The condition of the roof, plumbing, appliances, and foundation are all important considerations when you buy a home. Getting a final inspection is imperative, as a professional can find problems that are otherwise invisible to the untrained eye. If an inspector finds items that need to be fixed before you move in, you’re in a good position to negotiate the price of the home or request to have the problems addressed before you purchase the home. Without a final inspection, you may face the unpleasant surprise of buying a home that you then need to pour money into to fix.

Buying a new home is exciting, and it can be very rewarding. However, you’ll also need to plan in advance to make the process as smooth as possible. A skilled loan officer Las Vegas can help you navigate the path of home ownership to ensure you are a happy and satisfied first-time home buyer.