Feb 28, 2022
Buying your first home can be as exciting as it is scary. And first-time homebuyers can be particulary at risk of succumbing to avoidable pitfalls due to lack of experience. Let's go over some of the problems often overlooked by first-time homebuyers.
The biggest and one of the most common mistakes made by first-time homebuyers is NOT consulting first with a mortgage lender. This first and highly critical step allows the lender to take a look at your current financial condition and help you in so many ways.
By the way, don't confuse preapproval with prequalification. Prequalification gives you an idea of how much you qualify for based on good-faith assumptions - unverified information you provide to the lender, without official credit pulls and the gathering of all needed documentation for the process. Preapproval is a comprehensive evaluation of your credit and income (ability to repay) by an underwriter, and carries infinitely more weight than prequalification. Preapproval signals a lender's commitment to lend you the mortgage if your financial situation doesn't change after choosing a property meeting specific standards during the loan process.
The pre-approval journey with your lender will let you know how much you qualify for. But just because you qualify for a high amount does not necessarily mean you should get a mortgage at the very top limit of that qualification. Again this is where a caring experienced mortgage advisor can truly help in sorting out and evaluating the pros and cons so you can make the best decision for your life situation.
You may think a house is perfect by just looking at it. However, your assessment can never be as accurate as an official full home inspection. Professional home inspectors can detect issues you may miss and recommend the best recourse. The home inspection provides many valuable benefits. Some of those benefits include:
Your property acquisition can have hidden expenses, such as closing costs, property taxes, regular maintenance fees, and homeowners insurance premiums. As a first-time homebuyer, you can overlook these costs, triggering financial issues and stress if you didn't budget for them as you buy a house.
First-time homebuyers often struggle to meet qualification criteria (credit, down payment etc.) needed to obtain a conventional loan. Luckily, there exist a number of options, loan programs, opportunities and incentives that you may qualify for based on your income levels, where you live, where you want to buy, whether or not you qualify as military VA etc. There are even special programs designed to help specific professions (like first-responders, teachers etc.). This is where your lender can shine, by stepping up and guiding you though the maze of availale products and potential opportunities that may help craft an ideal loan package tailored just for your needs, and that makes your dream of homeownership possible.
Your mortgage is personal, and we understand that. At Preferred Rate, we believe that your mortgage experience does not have to be complicated. Whether buying or refinancing, contact us today and let us help you through the process of buying your dream home.