HUD Articles

If this is your first home purchase, there’s a good chance you could use some guidance. Home buying is a big process, involving a lot of paperwork and plenty of pitfalls. Take a look at some of the biggest home buying missteps newbies often make. Don’t fall victim to these classic home buying mistakes.  Hire a real estate professional to guide you through the process. 

1. Making a major life change while shopping for a Mortgage -  The pre-approval process analyzes your entire financial life. So don’t threw a wrench into things by suddenly changing your careers, starting your own business, getting divorced, or taking on more debt.  Don’t open a new credit card or buy a new car in the middle of house shopping.  They are major red flags for banks.

2. Skimping on the Down Payment  - We know that saving for a down payment is hard. Especially if you’re aiming for the traditional 20% down. For many first-time home buyers, that is basically impossible. To counter that, many mortgage lenders now have terms for those who can only save 5% or 10% of the purchase price as a down payment. That may seem great for your home buying efforts, but beware the total costs.  

3. Forgetting the "Extras" - You need to set aside somewhere between 1.5% and 4% of the purchase price of your home for extras.  These extra fees can include things like a deposit, property insurance, title insurance, legal fees, home inspections, moving costs, and mortgage insurance. And none of this include the expenses related to general maintenance and upkeep of owning a home — landscaping, replacing appliances,  a new roof every 20 years, etc. When it comes to buying a house, the purchase price is not the only thing you need to budget for.