Are you choosing a house to buy? If you are a seasoned buyer, you have fewer problems, but still face some definite difficulties. But, if you are a first-time homebuyer, you definitely can’t imagine how difficult it will be. The problem is that purchase of a house is a complicated transaction that is only made more difficult with necessity to get a mortgage.
A decision to move in a new house requires you to make a lot of responsible solutions. Most people don’t possess a necessary amount of money. Thus, you don’t just need to choose an appropriate house, you also have to think about a mortgage. For example, you can deal with a professional mortgage lending company to get all necessary information and financial assistance.
While choosing a lending company and a house to buy, you should be aware of the following mistakes people always make. Be more thoughtful and careful, if it’s your first home purchase.
The First Mistake: Choosing a Home before Applying for a Mortgage
It’s great to be pre-qualified for a home loan. This gives you necessary information about your monetary possibilities. You understand how much money you can get and this determines the price range to choose a house from. Thus, pre-qualification saves your time and insures a real estate agent in your serious intentions.
The other advantage of being pre-qualified for a mortgage you get when making a purchase offer on the house you choose. The seller will understand that you have enough means to make a purchase and the sale can be closed quickly.
The seller may have specific circumstances requiring him to close the sale quicker. That is why you can make a lower offer that will be accepted instead of a higher proposition that would demand more time to close.
The Second Mistake: Ignoring Programs for First-Time Buyers
First-time homebuyers can apply for different good programs. For example, you may get home loan interest subsidies or lower payment assistance. The secret is that you can still apply for such program, even if you were a homeowner previously.
According to definitions that these special programs use, a first-time homebuyer is a person who was not an owner of real estate for the last 3 years. So make a research and discuss your conditions with your mortgage lender, even if you had real estate in the past.
The Third Mistake: Choosing a Fixed-Rate Mortgage
It’s true that the most popular type of mortgage provides a 30-year fixed-rate. It’s still at historic lows as well. But this doesn’t mean it’s the best choice for you as a first-time homebuyer.
Think about your family and career ambitious and answer simple questions. Will your family grow soon? Are you planning to earn more? Or can it happen that you move to a larger house? If so, you should think about ARM (an adjustable-rate mortgage) instead of choosing a fixed-rate payment.
An ARM can give you lower regular payments and introductory rate, saving your money in the short period. Choosing a lower monthly payment allows you to think about a larger mortgage and purchase a larger house. But no traditional 30-year fixed-rate mortgage will give you such an opportunity.
You should understand that purchasing a house is a responsible step that has an influence on your future life. Think now about all the details and you will have the most appropriate mortgage and a house you want to live in.