Buying a house for the first time is exciting and fun. You are no longer stuck with beige apartment walls. Now you have the power to choose where to live, what type of house you want, and with custom homes, even what type of countertop material you prefer.
Common Mistakes of First-Time Homebuyers
The fun of shopping for a house and picturing your new home with you in it often leads to mistakes that can cost a first-time homebuyer later — and not just financially. Here are 4 common mistakes made by first-time homebuyers.
- Overspending. A house is such a large purchase that it’s easy to dismiss an extra few thousand dollars. But later, when your mortgage payment means no extra spending money for travel, retirement savings, or nights out, you might be wondering if it’s worth it. Know how much you can afford before you buy. You can use online tools and calculators as a guide, but they are just that — a guide. Consider what you pay now in rent and whether that’s an easy payment for you or a difficult one. Then consider that a house comes with the added cost of maintenance, something your landlord now handles.
You might be thinking you’re about to get a raise or that you’ll make more money in a few years. But there are no guarantees. It’s best to buy what you can afford now. Meet with a lender and get pre-approved for an amount you can afford, but remember that it’s OK not to use that full amount. Once you’ve done that, you can begin house hunting.
- Not getting a home inspection. Home inspections are optional in North Carolina. But it’s important to pay for one so you know exactly what you’re getting in a house. After all, this is (probably) the biggest purchase of your life so far. Know what needs to be fixed so you can decide if you want to live with it. Besides, inspectors offer other useful information about the heating and cooling systems, attic, and more about the general operation of the house.
- Not adding up the closing costs, insurance, HOA dues, and more. Closing costs on a $200,000 house in North Carolina might be $2,400 or more. Your homeowner’s association dues might be $50 to $400 per year or more. The cost of homeowner’s insurance (required) varies by house and location. All of these are costs you did not pay while renting and it’s an easy thing to forget while searching for your dream home.
- Being naive. First-time homebuyers often think they’ll have a house fixed up in no time at all. But houses that “need a little work” will probably take longer to renovate than you realize. Even the “easy fixes” can take years to get around to correcting. Naivete also appears up in the optimistic first-time homebuyer who buys in the wrong neighborhood. You can change many things about a house, but not its location. If the neighborhood doesn’t feel like your home for whatever reason, consider looking elsewhere, even if you love the house.