This list will take you through some of the most common first-time homebuyer mistakes. Don't do these things.
- Talking to one lender - No one lender, either a bank or a mortgage broker, can offer you everything. Talk to at least three lenders to get competing offers. After all, you buying a service; shop around.
- Not getting pre-approved - Every real estate can tell you about the hundreds of people who found their dream home only to have the bank say no. Know how much you can spend before you even look at a magazine.
- Moving too fast - The house you're looking at might be great, but it's not the only great house. Take your time. This is the biggest financial decision most people will make in their lives. You shouldn't be in a hurry.
- Too much house - If you don't need 10,000 square feet, don't buy it. It's just more to pay for and more to clean. During the house crash in 2008, there were millions of people who lost their homes because they bought massive houses they couldn't pay for.
- Messy credit - If you're even thinking of buying a house, take care of your credit. Lenders are going to look at it and you can save a lot of money by keeping your credit up.
- Drain savings - You need to have three to six months of savings to survive. If you take your savings account to zero buying a house and then have a problem, you might find yourself leaving the house really early.
- Be emotional - Don't buy a house on emotion. You're almost guaranteed to make a mistake.
- Not noticing the neighborhood - The perfect house in the middle of a war zone is not a perfect house. Make sure you weigh the neighborhood as heavily as you weigh the house.
- Ignoring the government - FHA, VA, and USDA homes are easier to get than most people think. Make sure you look at those programs before you settle.
- Watching for unicorns - If you're looking to buy the Palace at Versailles for $100k, you'll never buy a house. No home is perfect, so find the one that best fits your needs.
- Not thinking about the other stuff - It costs about $2000 a year to maintain a house. You need to have that cash or your dream home is going to fall apart around you.
- Ignoring gift money - Family and friends will offer gift money to help you with a down payment. Look around and consider who might be able to help. There are even charities that can help you. Be sure to discuss this with your loan officer.
- Thinking you need 20% - Most home loans don't require a 20% down payment. That's a myth. Don't wait to buy a home to have a ton of cash in the bank.
There are many other mistakes that people make, but these are among the biggest. If you steer clear of these mistakes, you'll be in pretty good shape.