Purchasing a home for the first time is a major financial decision. While many are eager to dive right in to the real estate market, a little bit of caution is necessary when purchasing for the first time. Buying real estate without thinking it through can lead to the purchase of a home that doesn't suit the homeowner's needs or their budget. Here are three mistakes that many first time home buyers make and how to avoid them.
Not Knowing What They Can Afford
When it comes to purchasing a home for the first time, budget is incredibly important. Buying a home that's at the top range of what's affordable can lead financial strain every month when the mortgage is due. Knowing how much they can afford is essential for first time home buyers. What's affordable for a home buyer will differ depending on income, debt level, and how much of a down payment the home buyers have available to them. A good rule of thumb is that the home's mortgage plus other debt payments should not account for more than 36 percent of the home buyer's monthly income. First time home buyers should come to the table knowing how much they can get financed for as well as how much mortgage they can comfortably afford.
Not Hiring A Real Estate Agent
While it may be tempting to search for homes without a real estate agent, this can be a costly mistake. Purchasing a new home involves a lot of paperwork that can be very difficult to navigate without the help of an experienced real estate agent. Plus an experienced real estate agent can help determine whether or not the home is the right fit. A home may look great to a home buyer but a real estate agent will know of potential future problems. A real estate agent is essential for first time home buyers.
Failing To Get A Home Inspection
It happens a lot, someone falls in love with a home and purchases it without a home inspection only to run into major issues down the line. Getting a home inspection before purchasing is a crucial step that many first time home buyers skip. The average home inspection costs $323. While some may be reluctant to pay, a home inspection can identify major problems that can cost a lot of money to fix. First time home buyers can either decide not to purchase the property or can ask for a reduction in price.
Purchasing a home for the first time can be an exciting experience. However, it's important to avoid certain mistakes that many first time home buyers make. First time home buyers should know what they can afford, hire a real estate agent, and make sure that they get a home inspection.