It can be a good idea to prepare your finances before looking for a home.
Shopping around for a mortgage may help you save money.
Utilizing first-time homebuyer programs may lower your upfront cost.
Buying your first home can be a big and exciting step. However, the real estate process can be tricky to navigate, and it may be easy to make costly mistakes.
Here are some common first-time home buyer mistakes – and how to avoid them.
1. Not preparing your finances first
Preparing to buy a house should start before you see your first property. A few months before you start shopping, it’s a good idea to ensure your finances are in good shape. Doing so can make the mortgage qualification process easier.
As early as you can, you may want to work on building your credit score and saving up some extra cash. If you haven’t already, start making your payments on time and pay as far above the minimum payment as possible. It can also be a good idea to set a manageable goal for how much you’d like to save each month and stick to it.
2. Not shopping around for a mortgage
When you’re ready to start the real estate process in earnest, one of the first steps is to pick a lender. However, before you make your decision, it can be a good idea to compare. A recent survey found that borrowers saved an average of $1,500 if they got at least one additional mortgage quote and $3,000 if they got five quotes.
If you decide to shop around, it can be a good idea to get your quotes during the same 2 week period. This way, all those credit inquiries may be combined into one on your credit report. You’ll also probably want to do your best to give each lender the same information. This can make it easier to do an apples-to-apples comparison once you have the quotes in hand.
3. Ignoring first-time home buyer programs
Lastly, you may want to ask your lender about available first-time home buyer programs. As the name suggests, these programs can help first-time home buyers shoulder the upfront costs of buying a home. Although each program is different, they typically give money in the form of grants or low-interest loans with the goal of helping buyers with their down payment or closing costs.
Not everyone will qualify for these programs. Always do your research to make sure you’re setting yourself up for the easiest and most enjoyable transaction.
This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.
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