Researching different types of mortgage loans and trying to determine which one is best for your situation can be confusing, especially as a first-time homebuyer. At Reichert Mortgage, our knowledgeable team is dedicated to helping the current and future residents of Colorado Springs afford their dream homes. Whether you are interested in learning more about VA home loans or need help deciding if you should refinance your home, we are here to help you throughout your entire home mortgage process.
As one of the top mortgage brokers in Colorado Springs, Reichert Mortgage Team is passionate about helping people find the right loan for them and their families. In an effort to serve the Colorado Springs community to the best of our abilities, we’ve created a resource center for first-time homebuyers that helps guide you and answer all of your questions, including what mistakes to avoid as a first-time buyer.
Common First-Time Homebuyer Mistakes And How To Avoid Them
Becoming a homeowner is a long and extensive process. If you’ve never done it before, it can be difficult to understand all the moving parts that go into purchasing a home. Not only can the specifics of certain loans be vague and hard to understand, but there may be loans available you didn’t even know existed. Below is a list of some of the most common mistakes made by first-time homebuyers, and what you can do to avoid these situations.
- Neglecting First-Time Homebuyer Programs
- Purchasing a home is by far the most expensive purchase you’ll ever make, so you want to be sure that you’re receiving the best deal possible. As a first-time buyer, take advantage of the programs that are available specifically for those who have never purchased a home before.
- Ask your mortgage lender which first-time homebuyer programs are available for residents in your state. These programs can be the difference between you being able to afford your dream home or not. Some of the most popular programs include FHA loans, which may allow you to have a down payment as low as 3.5 percent, and VA loans, which allow some military to obtain a loan without a down payment.
- Failing To Figure Out How Much House You Can Afford
- If you begin the home buying process without thoroughly looking at your finances, you’re most likely going to end up wasting your time and energy. As a homebuyer, your primary goal is to purchase a house with a monthly payment you can easily afford. And once you set a budget, stick to it. We know it can be tempting to overbid in a competitive market.
- After going through and organizing your finances, make sure to use a mortgage calculator. Tools like this can help you see what you can easily afford, what might be a bit of a stretch and what is absolutely outside of your price range.
- Depleting Your Savings
- Many first-time homebuyers make the mistake of using the majority, if not all, of their savings to make a down payment on their dream home. It’s crucial to leave yourself a good chunk of change so that you have enough money to cover any unexpected repairs you come across.
- Speak with your mortgage lender and discuss an estimation of your closing costs. After you receive that number, add it to your moving expenses and down payment. This will give you a pretty good idea of the entirety of your moving costs so that you will be able to budget accordingly.
- Being Unaware Of Your Credit Score
- When someone applies for a loan, one of the first things a lender looks at is the applicant’s credit score. Credit scores help mortgage lenders decide whether or not they’re going to approve a loan application.
- It’s important to stay up to date with your credit score and make sure you dispute any errors that you find on your credit report. An individual is allowed to request a credit report for free once a year from the three main credit bureaus without their credit score being impacted, so take advantage of this tool.
- Underestimating Renovation Costs
- As a first-time homebuyer, it’s rare to purchase a brand new house. Most likely, you’ll be buying a home that needs at least a few repairs in order to be move-in ready. If you’ve never renovated a house before, the costs can be shocking.
- A great way to ensure that you have plenty of money to cover renovation costs is to assume that the contractor estimates you receive are low, and double them. Doing this makes sure that you have enough of a cushion to cover any unexpected increase in repair and renovation costs.
Reichert Mortgage Team Is A Premier Resource For First-Time Homebuyers
Becoming a homeowner is an exciting milestone, and our knowledgeable team would be honored to help you during your homeowner journey. We are happy to support you and answer any questions you may have, from wanting to better understand mortgage terminology to learning about different loan programs in Colorado. If you’re about to begin your journey of buying your first house, contact Reichert Mortgage so we can help you during the process.