From LandlordStation.com: Avoid First-Time Homebuyer Pitfalls
The fear and anxiety first time homebuyers experience is universal. Everybody has heard the horror stories of the money pit house, evil mortgaging companies, and shady real estate brokers. The easiest way to overcome these fears is by confronting them and understanding the most common mistakes and misconceptions of the first time homebuyer.
Undergo a Self-Assessment
Before purchasing a house do a self-assessment to find out where you stand and how much you are capable of purchasing. Get a credit report from all three agencies and fix any problems that appear. Don’t start looking for a house until you have a credit score of 620 or higher.
Line Up Your Credit
Once your credit is in line, look for a home with an affordable monthly payment. A realtor will try to push you towards a more expensive home to increase their own profit. So talk to a local mortgage broker to found out exactly what monthly payment you qualify for.
Bring Cash on Hand
On top of being able to qualify for the mortgage you will still need a significant amount of cash to purchase you first home. Save up enough money for things like the down payment, home inspection, appraisal, closing, and a smart shopper will also have a reserve equal to about 6 monthly house payments.
If you are currently in a lease agreement then an early release agreement will need to be arranged. So, you will need to save around an additional 1.5 months’ worth of your current rent to get out of the lease.
Understand the finding a home you will live in for many years to come is a real commitment—not a weekend project. The average homebuyer spends about three months shopping for a home before finding the one right for them.
Decide What You Want
Write down the basic essentials that your ideal home will need to have. As you are searching for the right home keep your list handy and don’t settle for a home that doesn’t meet all of your demands. Once you do find the right one, though, act quickly.
Decide what size down payment will fit within your budget. If you are unable to put down 20% or more than your monthly payment will be higher to cover the cost of private mortgage insurance.
You should work closely with your lender and realtor. If the realtor is not agreeable to you than get a new one. There is no shortage of them. Also, keep constant communication with your lender, letting them know where you’re at throughout the process, even if it means using your work breaks and lunch to make phone calls.
Get an Inspection
Always get an inspection for the home you are considering. This will give you an idea of the current physical state of the home and how much work will need to be put into it. And never get emotionally attached to a home. It will never return those feelings.
To make your first home purchase a success you must have conviction to buy and plan to live in the area for at least five years. Get pre-approved with a lender and develop a good working association with your realtor. Remember, they work for you. It may seem daunting at first, but if you stay committed during the entire process you will be able to buy the right home with confidence.