Buying a home, especially for the first time, can be a daunting process. There’s a long list of steps, and if you’re not properly prepared you might end up experiencing some hiccups along the way. Today, we’ll outline five mistakes you should avoid if you’re beginning your homebuying journey for the first time.

Not Getting Pre-Qualified

Starting the journey to your first home can be exciting, and you’re undoubtedly going to feel tempted to start browsing Zillow or other listing sites looking for potential new homes. What you may not realize is there are a couple crucial steps you need to take before you start your house hunt.

Connecting with a lender and getting pre-qualified will not only help you determine how much home you can afford, it’ll also set you up to be ready to make an offer as soon as you find a home you love. In today’s competitive market, already having your finance options ready will allow you to act fast if you decide you’ve found the right home.

Not Test Driving Your Mortgage

Our lenders have long preached the importance of ensuring that homeownership is a sustainable investment for your family. Since your mortgage payment isn’t the only bill you might add if you buy a home, it’s important to estimate and test out paying extra expenses that come with owning a home. These might include additional utilities, maintenance fees, insurance fees, etc.

Test driving your mortgage will help you determine if you can actually afford to own a home, and you’ll be able to avoid any surprise costs that come with your investment. The best part of test driving your mortgage is that you’ll be able to save any extra money you “spend” during your test run – which you can then use toward down payments and closing costs on your new home.

Changing Jobs

Like the housing market, today’s job market can feel volatile and incredibly competitive. Sometimes you can’t skip out on the opportunity for your dream job, but be aware that it can cause issues for your homebuying journey depending on what stage you’re at. If you’ve already submitted income paperwork and gotten pre-qualified, changing jobs might require you to have to start the process over. This can create major delays and possibly cause you to miss out on homes that could be perfect for you. If possible, avoid changing jobs until after you close on your new home.

Spending Your Savings

Saving money is an integral part of purchasing your new home. Whether you’re saving for added expenses, closing costs, down payments, or new furniture, it’s important to have a nest egg you can use toward your new home. However, spending money you have set aside for necessary steps of the homebuying process, or making any big purchases during the homebuying process, can majorly affect your assets. To avoid this, either keep your asset accounts separate from your spending account or just hold off on any big purchases until after closing day.

The other side of protecting your savings is to ensure you don’t empty your life savings on the purchase of your home. While it is a major investment, it’s important to still have funds for emergencies or surprise costs during the homebuying or moving process. Spending your entire savings on purchasing a home may be a sign you’re not quite ready to take that step, so keep saving and revisit it when it’s a more sustainable investment.

Opening New Credit Accounts

Your credit score is a major factor in determining how much financing you qualify for, what loan program options you have, and even what your mortgage rate might be. It’s crucial that during the homebuying (particularly the pre-qualification) process you don’t make any changes to your credit score.

Credit changes can come in a variety of forms, but the most common ones you may not think about are opening new credit cards or financing purchases for your new home. Any kind of financing or account you have to pay off can mean changes to your credit score. In addition, credit inquiries can have a major impact on your score. If you're not careful, these accounts can add up and make you lose out on more favorable loan terms. Make sure you keep your accounts the same until after your purchasing process is over.

Buying your first home is an exciting, but delicate process. The most important rule of buying a home is to ALWAYS reach out to a lender first. They’ll set you up for success and help you avoid making mistakes that can throw a hitch in your homebuying journey. Feel ready to get started? Reach out to an experienced Flat Branch Home Loans lender today.

5 Mistakes First-Time Homebuyers Should Avoid