When you're fully invested in buying a home it can be a pins-and-needles process, and that goes triple for anyone who’s embarking on homeownership for the very first time. Being in-the-know eases anxious feelings, so follow the Scouts motto and Be Prepared.
Even though you don’t want to scare yourself away from the entire process, you still need to be wary of falling into a few common traps that first-time buyers generally don’t avoid. If you’re aware of these five potential mistakes -- and able to keep yourself from making them -- then you’ll be saving yourself some significant stress on your homebuying journey.
1. Understand your down payment options
The biggest headache for so many first-time buyers is the down payment. If you’ve ever bought a car, then you’re probably familiar with the concept -- it’s money that you contribute to the total cost of the purchase.
- A down payment of just a couple thousand dollars can get you a head start on your car. If you don’t have a certain amount to put down on your home loan, however, you might find yourself paying private mortgage insurance (PMI) on the lifetime of the loan.
- Depending on your credit score, the bank and other factors, PMI could cost between 0.5 percent to 1 percent of the total loan amount.
- Most banks require at least a 20 percent down payment before they will waive the need for PMI on the loan. And most homes in this area cost about $300,000, so that means a buyer would need to bring $60,000 to the table in order to avoid PMI. There are loan programs that can help reduce PMI that are worth exploring. Always know your options by reaching out to your trusted Realtor® and their trusted lender(s) to explore your options.
- Some government organizations and lenders try to incentivize first-time homeownership by offering free down payment grants or loans to qualified buyers. Depending on your age, income level, credit score and other factors, you could qualify for free money to wrap into your down payment and even carry-over to cover some closing costs; we have the hook-up for the top lenders in the area working with these programs to help you clear any financing hurdles and to keep your costs lower.
2. Get prequalified for a loan
Between the amount of money you plan to put down on the home, the potential PMI and other cost factors, your monthly cost could be significantly more (or possibly less) than some of those calculators will show you online.
So before you trust those “estimated monthly mortgage loan amount” numbers that you see popping up next to your potential new dream home, it pays to figure out what you can actually afford -- and that means getting prequalified for a home loan.
This means you will need to talk to a mortgage loan officer and submit a slew of documentation, from your monthly pay stub to your credit score, in order for that loan officer to tell you how much money you can get for your home loan. It’s a little bit painful, but the prequalification letter you’ll get as a result is much more credible than a quick qualification you can pull up on an app -- and that means sellers will take it more seriously when it comes time to put in an offer.
3. Align yourself with a qualified real estate agent
It’s so easy to find homes online these days that you may wonder why a real estate agent is even necessary. After all, isn’t the hard part -- finding the place you want to buy -- something you can do yourself?
The reality is, while online platforms like Zillow have made it easier to browse listings, they can’t match the insights and strategic edge a skilled agent provides. In fast-moving markets, agents have a pulse on homes that may not even make it online, including pre-market opportunities or those shared exclusively within their networks. With an agent, you're not just browsing—you’re positioning yourself to make timely, competitive offers and securing guidance through every phase of the transaction.
Not only can an agent make sure you have access to listings the second they hit the MLS, but a qualified agent should also provide expertise on the area where you want to move and when seeing it in person what does/does not bode well for comfortable living and return on investment. Another pro about working with a pro, is the list of pros they're affiliated with.. A well-connected Realtor can help you with homeowners’ insurance, inspections, lending, surveyors, service pros, etc.
4. Spend the night in the neighborhood, or at least the evening
If it’s at all possible, see if you can find an Airbnb or another vacation-rental type of setup where you can crash for a night or two -- preferably closer to a week -- so you can try your new neighborhood on for size.
- Is an 8 a.m. arrival time at work still reasonable with this neighborhood’s commute?
- Where are the closest grocery stores, parks, rec centers and hiking trails?
- What are the overnight noise levels? If there’s a train that rolls through town in the early hours of the morning, you’re near a highway or a flight path -- and any of that is going to disturb you -- then it’s best to figure it out before you’re spending your first night in your new home and wake up to unpleasant (and unexpected) noises.
- At the very least, you can learn enough about the neighborhood to know how close to (or far away from) the bus line you need or want to be and target your home search accordingly.
 |
 |
5. Understand what’s fixable and what’s a deal-breaker
Those drop panels in the ceiling are hideous, and you can’t imagine how anyone can fit into that miniscule bathtub. Are those annoyances that can be fixed or deal-breakers that mean you should pass on the property entirely?
This is another area where a good real estate agent can help. They see so many houses in various stages of repair and updating that they can show you where you can claim another foot or two for bathtub space (and help you figure out how much it will cost and who’s trustworthy enough to take on the job) or let you know that the ceilings are too low for any changes to make much of a difference.
Overlooking these considerations will not keep you from buying a home of your own -- but could delay the process and cost you hundreds (if not thousands) of dollars at the end of the day. If you’re able to employ them, though, you’ll be signing the closing papers on your dream home before you know it!
6. Set yourself up for success in the "off-season"
While there may be more selection of homes in the spring and summer seasons, the homes that have been on market longer in fall and winter months are the ones buyer are likely to buy with equity in a hot market so while interest rates may not be "ideal" a purchase price can be... because interest rates are volatile and home prices continue to climb year-over-year so delaying the purchase overall isn't a solid strategy but timing the seasons for price reductions has often proven to be.
The early bird gets the worm in nature, and in the housing market the buyer willing to move in the later, colder months typically gets the better deal on price.
Stay plugged in with your agent and on home search results... observe the pricing trends September to October to November and so on through winter months. October is considered the month when most of the price reductions are taken advantage of, but December is considered the slowest month of all on the calendar and best to score a deal. Ask yourself if you're willing to move in 'less-than-ideal' weather conditions for the right home and right price...
While this is merely an overview, we hope you get the sense that buying a home is a series of steps and insights and it should be rewarding vs. overwhelming.
Thank you for reading another of our bite-sized blogs - As always, we hope you have one or more helpful takeaways. For our Complete Buyers Guide, please drop an email with that in the subject line to movehappily@wmihometeam.com, then check your messages for it. No spam, just valuable info.
