The #1 Mistake of First Time Home Buyers
It happens every day to Realtors yet I’m always surprised when it does. Just yesterday, an eager young buyer found my website and began to request information on 8-10 properties.
When I spoke with her I learned that she not spoken with a lender to know what type of mortgage she qualified for, and that she did not have a down payment.
How do you go shopping for homes without even a down payment? Unless you are military, you don’t.
As I told her, this is the time to be saving money, check your credit report and scores and address anything that’s necessary.
It certainly seems appropriate to be touring open houses if you want to get an idea of what’s out there. But getting specific about properties? No – it’s just too early.
I sell homes for a living so why do I care? Because when buyers look at homes before being properly qualified, there is invariably disappointment. I’ve seen it repeatedly. First time buyers ALMOST ALWAYS start looking at houses above their means. Perhaps they’ve run the numbers on a mortgage calculator and have an idea what they can handle.
Becoming qualified for a loan is a somewhat arduous process whereby the lender is going to look at your entire financial picture including your debts, assets, and income. They won’t let you borrow more than a certain percentage of your income.
You’ve probably never gone to purchase a car, a piece of furniture, or an expensive item of clothing without having an idea what you can spend. Why would you do that when buying a home?