Obtaining a mortgage can be complicated at the best of times, but especially so for first-time home buyers.
There are many ins and outs to the home loan process, and there are plenty of mistakes all first-time home buyers will want to avoid.
1. Not considering extras
When thinking about a home loan, first-timers generally focus on the principal balance amount. However, as with most things in life, there are other things to consider.
Mortgages come with closing costs – the fees and expenses that must be paid in order to process a loan application and close on a home purchase.
Not accounting for these costs can leave home buyers at a disadvantage, and lead to them overextending their finances.
It's important for home buyers to fully understand the complete cost of taking out a mortgage, not just the magic number that will allow them to purchase their dream home.
2. Skipping preapproval
There's a big difference between what a home buyer thinks they can afford and what a lender is willing to give. However, all too often, first-time home buyers begin their house hunts without first finding out how much they can borrow.
By getting preapproved by a lender, buyers will have a much better idea of how much money they can count on, and therefore how much house they can afford.
3. Foregoing help
Buying a home is a major undertaking, and obtaining a mortgage can be confusing, so it only makes sense to reach out for help.
Unfortunately, many first-time home buyers attempt to go it alone, and in the process miss out on invaluable advice from mortgage professionals that can help streamline the process, and, in some cases, save them money.