Check your credit before you start to buy. Yet another mistake that many first home buyers make is assuming their credit is good before they make an offer on a home. They discover way too late that they cannot go through with buying the house because their credit is not good enough and the entire deal falls through.
Get pre-qualified or pre-approved. Your best bet is to get pre-qualified or pre-approved for a mortgage before you even start shopping for a house. This prevents you from wasting your own and everybody else’s time later in the game.
Home sellers will not even consider entertaining an offer unless you are at a minimum pre-qualified, and your realtor should require it before he or she even takes you to look at homes.
Consider a home’s flaws as well as strengths. The desire to live in a particular neighborhood or in an adored housing style can also cause you to be blind to some of the flaws of the home. Are you really prepared to deal with low water pressure for years, very old major appliances that might break down at any minute, or replacing that clay tile roof? Make sure that you have funds in order that will help you pay for things if these break down. This is especially true if you want to buy a historic home.
Don’t skip on inspections. Before buying, make sure that you get all of the inspections that you can afford as that can save you a lot of money in repairs down the line.
In addition to the standard home inspection, consider a sewer scope, asking for a roof inspection and certificate, a furnace inspection and certificate, and depending on the results of your home inspection, specialists to review items of concern. Always demand licensed/insured contractors for all repairs and replacements necessary, with receipts and warranties at closing.
Shop around for the best mortgage broker and loan. When shopping for a mortgage broker, many first-time buyers just go with the broker who throws them the lowest figure. But beware: low figures can change once the company feels they have “hooked you.” Go with a referral from a trusted source, your realtor who closes dozens of deals every year, or your own bank.
It is also a mistake to take out what is called a sub-prime loan. This is a very expensive mortgage with a super-high interest rate. It might be offered to you if your credit rating is not so hot.
Keep in mind that as desirable as it may be to have a bit of equity, making an expensive deal may not be worth it in the end because you will end up paying thousands more than you would have if you had simply cleaned up your credit rating and bought a home at a later date.
Overall, don’t panic about “missing the market” or “missing the low rates.” Do your homework and be assured of the single best investment you may every make.
Author Jeff Hammerberg is the founding CEO of www.GayRealEstate.com.