How To Avoid 3 Mistakes FirstTime Home Buyers Make

Dated: 07/20/2018

Views: 32

Look out for these pitfalls before you take the leap into purchasing a home.

Everton Allen, now 28, graduated from college and was living with his parents while working as a graphic designer for the Miami Dolphins when he decided he wanted to start his own company and buy his own home.

“I’d saved for a down payment over several years,” he says. “But I was worried it wouldn’t be enough, and that not having a traditional salary would affect my ability to qualify.”

Such misgivings are common — prevalent, even.

Fannie Mae’s Economic and Strategic Research Group conducted a survey to gauge consumers’ understanding of mortgage qualification criteria. About 40 percent of consumers responded “don’t know” when asked about requirements for minimum down payments, and 54 percent and 59 percent, respectively, said they didn’t know required minimum credit scores and maximum back-end debt-to-income (DTI) ratio.

Get professional advice

Allen sought help from a housing counselor at NID-HCA, a HUD-approved counseling agency in Miami Gardens. The counselor reviewed his credit, helped him make some adjustments, and assured him he could qualify for Fannie Mae’s HomeReady Mortgage.

HomeReady lets borrowers put as little as 3 percent down. It also requires completion of a $75 online pre-purchase education course by Framework Homeownership. “The course was a great tool that helped me to reach my goal and feel really prepared,” says Allen.

Allen worked with a local real estate agent to purchase a 2-bedroom, 2-bath single-family home. He’s been a homeowner for about six months, and has transitioned to self-employment, retaining the Miami Dolphins as a client and adding the Miami Marlins.

“I’m handling the mortgage payments just fine,” he reports. “It’s great to own a home and be self-employed.”

Learn the process

By seeking help, Allen avoided the pitfalls that trap some would-be buyers.

“First-time buyers don’t know what they don’t know,” says Dawn Lane, broker/owner of Professional Realty Group in Las Vegas, NV. Lane says she’s seen it all — from tears to screams — when buyers can’t get a home they’ve fallen in love with.

“There’s a difference in how first-time buyers versus veteran home buyers view the purchase journey,” notes Steve Deggendorf, a director of market insights research in Fannie Mae’s Economic and Strategic Research Group.

“If consumers learn more about shopping for both their new home and their new mortgage, they will be more prepared to embark on the largest purchase most will make in their lifetime,” he states. A lack of home-buying knowledge can not only slow a deal, it can kill it, Lane points out.

Common pitfalls

Here are three predicaments first-time buyers may encounter along the purchase journey:

Going it alone. It’s great to do some online home shopping — and you might see homes in neighborhoods you’re considering and think a quick visit can’t hurt. Think again, warns Lane. Your first step should be talking with a housing counselor, lender, real estate agent, or other trusted adviser to help you understand if you’re ready to buy or if renting could be a better option.

According to the Zillow group consumer housing trends report, only 46 percent of buyers did not get the first home on which they made an offer, demonstrating that in today’s fast-moving market, “disappointment and competition are now part of the process.” You need an ally who knows the system inside and out

And remember, being approved for a certain amount doesn’t mean you have to spend that much. “You should decide how much you’re comfortable paying for your mortgage each month, considering all of your expenses beyond the mortgage, and focus on homes within your budget,” notes Deggendorf.




Next Page Realty

480-485-3775

info@nextpagerealty.com

Blog author image

Sina Sabeti

Sina Sabeti is the owner and designated broker of Next Page Realty. His specialties are fix and flip deals, rental property acquisition, short sale processing, mortgage origination, and commercial....

Want to Advertise on this Site?

Latest Blog Posts

Rent To Own Phoenix

We are excited to help you get into a new home where you can finally buy it versus renting for years!! Please register and fill out your buyer profile so we can prequalify you for a home

Read More

May 16 2019 64203 1

Best Activities to Beat the Summer Heat in Arizona1. Six FlagsPreviously known as Wet 'n' Wild, Six Flags Hurricane Harbor is the new name of the local water park that is loved by many. Although new

Read More

Apr 3 2019 64203 1

Top 3 Spring Festivals in Arizona Rose Tree Parade and Festival The celebration of the World’s Largest Rose tree on April 12-14, 2019. The event kicks off with a student from Tombstone

Read More

Feb 28 2019 64203 1

Top 3 Ice Cream Parlors in Downtown PhoenixSnoh Ice ShaveryModeled after the Southern Chinese dessert, known as BaoBing 刨冰 (Shaved Snow), this sweet spot worked its way through

Read More