After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
If you are shopping for your first home, you have a lot sitting on your plate. After all, this is one of the biggest decisions you will ever make. You want to make sure you are doing everything right. Before you opt to sign on the dotted line, make sure you understand these common mistakes first-time buyers make during the mortgage process.
Mistake #1: Not Checking Your Current Financial Status
If you haven't checked your credit recently, you might already be making a big mistake. You need to make sure that you have paid everything considered a debt in your name and ensure that you have nothing late in your name. When you apply for a mortgage, lenders are going to be picky. Don't leave anything for them to use as a red flag against you.
The best thing you can do is check your credit report before you try to find lenders. If you find errors, dispute them right away. Pay anything that you owe and check your score against lender requirements.
Mistake #2: Not Checking Out Different Mortgage Lenders
Just as you are shopping around for different houses, it also pays to shop around for different lenders for your home loan. The earlier you build a relationship with a lender, the simpler your homebuying process can be. Get to know interest rates and terms offered by your lender so that you are prepared for the financial aspects of a home purchase.
It is always smart to ask for opinions from those who have had good experiences with lenders. Your real estate agent may also prove to be an incredibel resource.
Mistake #3: Accepting an Unmanageable Loan
Some loans are simply too big for some buyers to handle, and this is fine. Still, it is important that you select a type of loan that you can afford monthly, not just right now. Avoid becoming house-poor, meaning that you have money only to pay for the house.
Mistake #4: Not Realizing the Cost of Owning a Home
Owning a home comes with many different costs associated with routine maintenance and repairs. These costs are not consistent, and emergencies may happen. Think of a house in a similar way to a car. Emergencies happen. You will also need home insurance to cover some of these instances.
Avoid making these common mistakes by understanding the mortgage loan process and asking for help from real estate professionals who can answer your questions.
Share18 October 2017
