K.M. Minemier & Associates is a certified Woman Owned Small Business (WOSB) engaged in full service real estate asset management and marketing.

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5 COMMON MISTAKES FIRST-TIME HOMEBUYERS MAKE

May 15, 2023

 

1: Spending more than you can afford – Before house shopping it is good to take a good look at your budget to see what type of payment you can comfortably afford each month.  A good rule of thumb is your mortgage payment shouldn’t be much more than 28% of your monthly gross income.

2: Not preparing for the mortgage process – As a first-time buyer you’ll need to ensure you have all of your documents in order.  A lender will need to review your taxes, pay stubs, bank accounts, and your credit.  With having a good credit score and a lower debit to income ratio will help improve your chances of securing better loan terms. 

3: Confusing prequalification and preapproval – While a prequalification gives you an estimate of what a mortgage company may lend you it isn’t a guarantee.  Whereas a preapproval is a conditional loan approval where a lender has reviewed your documentation needed, income etc.  Ensuring your approval has been reviewed by an underwriter.

4: Not having a home inspection – While having an inspection done is another expensive at the time not spending that little bit of money could potentially cost you thousands down the line.  The inspection is to bring attention to any potential issues with the home that the average buyer would not typically see or look for.  If something is found, there is always a possibility that the Seller would help offset the cost by offering concessions or reducing the price if negotiated.

5: Not preparing for closing cost- Beyond the earnest money deposit and down payment amount a buyer must make there are other fees that would be due at closing.  If not preparing it could be sticker shock!  Other fees a buyer could encounter are title insurance, loan fees, PMI, homeowners’ insurance and taxes.

Ensuring you are knowledgeable in this process and asking questions to the professionals you are working with is key!


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