As a first time home buyer, you may be extremely anxious and excited about the process of buying a new home. But a word of caution: there are mistakes that you want to avoid when buying a house, namely when it comes to the mortgage. Mortgages can be tricky to figure out, especially if you’ve never had to purchase one before. Here are three things you should avoid with your mortgage as a first-time home buyer.
Not Looking Carefully at Mortgage Terms
One mistake first time home buyers make is not looking carefully at the mortgage terms. Mortgages may seem long and full of legal jargon, but it’s important to look carefully at the terms, even asking your lender for clarification so you know what you’re getting into. Sometimes the terms differ from what you were originally offered. In fact, sometimes the rates and closing costs a lender offers are different. To avoid any surprises, it’s important to be thorough before you sign a mortgage agreement. Don’t let the mortgage company take advantage because your a first time home buyer.
Not Maintaining Your Credit Score
Another mistake to avoid is ignoring your credit score. In order to get preapproved for a loan, you need a good credit score, but if your credit score changes over the course of your time house shopping, you may have difficulty being able to close on a house. Buying a car while you’re house shopping is not advisable. Neither is racking up your credit card or forgetting a payment on any of your debts. If your credit score isn’t good, you won’t be able to get the loan you need to pay for your home.
Looking at Homes Before You Have a Mortgage
A third mistake to avoid as first time home buyers is looking at homes before you have a mortgage. It may be tempting to start looking for houses, but if you don’t have a budget determined, you will have difficulty affirming to the buyer that you’ll be able to pay for the house. Looking at homes before you have the mortgage is like looking for Christmas presents without your wallet. You might find something you love, but you won’t be able to pay for it because you don’t know how much money you have to work with.
Before you buy your first home, take time to learn about mortgages. That way, you can make an educated decision as you look for houses so that you can buy the house of your dreams.
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