10 Financial Mistakes to Avoid for First-Time Homebuyers

First time homebuyers. This is for you. I listed ten financial mistakes to avoid when you’re looking to purchase your first home. Stay with me for ten financial mistakes to avoid when you’re in the middle of considering to purchase your first home. I am listing our amazing loan scenarios for you as well to get the best deal possible. My name is Janine Sasso. I’m a local real estate agent in the northwest suburbs of Chicago, and I help first time homebuyers accomplished exactly what they set out to do, buy the very first home and feel good about the process along the way. So it starts all with looking for your mortgage. Yes, I know you hear it over and over and over again. Now, here’s the thing. I actually found that most buyers have a pretty realistic understanding of what can I afford. I have so many examples of when my clients came to me and said,

Well, we want to be in this price category. We think this is what we can afford. And sure enough, they fell right in or above what they thought was possible. So now you might think, well, if I want to kind of have a realistic expectation. Why go through the hassle? So let me tell you why. Now, here is the first two reasons you do not want to fall in love with a home. Just so you have somebody crush those dreams and say, I’m sorry, you can’t afford it. This is devastating in so many levels. And the other thing is you want to be so prepared that if your dream home comes on the market, you’re ready to go.

You do not have time to waste to get documents and to get a pre-approval. If somebody really wants the house, they are prepared and they’re ready to go beating out somebody that does not have a pre-approval in place. The second thing is only to talk to one lender. Why would you only want to talk to one person? Now I get it. I have a relationship with an amazing lender and yes, I would throw my clients to them. However, the conversation also goes something like this.

Here’s an amazing person I know that can do an amazing job for you if you want to shop around. I highly encourage you to check it out, to maybe want to check with your bank or whatever. Always make sure you know all the details. Sometimes they give you an amazing right up front and you’re like, Oh, this is so much better. But then tell you about things that you should know, which is, are you buying down the loan with discount points?

There’s other videos I’ve done about this one so you can, you know, send me a message, let me know if you want to check some of those out. But just like going for a car loan, I highly encourage you to at least look at your options prior to committing. You can definitely shakara those two or three lenders prior and look honest if you’re getting preapproved. It’s really, really painless. So pay attention to the communication.

How swift is it? How easy is it to get things to them? Because once we do have a home for you under contract, you want somebody that is responsive on the ball and communicates really, really well with you. And as a pre-approval takes a day, two or three day, four days. This is for me a red flag in the industry saying, wow, if you do this in the beginning, what service do I expect when I’m in the middle of purchasing my home? The third mistake buying more home than you can afford now, and I’m not necessarily talking about, you know, affording in terms of purchase price. I want you to really look closely at your monthly mortgage payment. I want you to look at that payment. What are you comfortable with? Chances are your lender will say, hey, congratulation, you are approved for $500,000. This amount in itself to me as a real estate agent doesn’t matter much. My client and I always sit down and we go by the monthly numbers. The loan and the purchase price can vary so much based on our taxes that it’s really a better way to structure a home purchase scenario based on your monthly mortgage payment goals. Mistake number four. We are on number four already and that is draining your entire savings to purchase a home. My goal is always to make sure my clients have about at least $5,000 or more left behind in case of emergencies. Owning a home is kind of like having children, right? You have an emergency fund, somebody breaks an arm, somebody falls off a tricycle, and God knows what happens. Having that little piece of reassurance is really taking the edge off just a little bit. And same with your house. So consider having a fund. If somebody says just put a little bit more down, drain all the savings. That for me is kind of like a red flag of this is not a safe way to purchase a home, especially the first time around. Mistake number five when it comes to purchasing a home for the first time, being careless with your credit cards. Your credit cards are. A vital component to the mortgage pre-approval and mortgage loan application process. So you want to make sure that you have any purchases you’re making on a credit card that are out of the ordinary or they are larger. Verify those with your lender. First, it is super important that you a debt to income ratio stays within certain limits. So don’t go crazy on credit cards buying furniture. Yes, we are all excited that you’re going to get that house. But first things first, let’s get the house. Otherwise we have to return the furniture. And you’ve a sleeping in your part. Financial mistake. Number six is the assumption that you need to have 20% down for a mortgage down payment. You don’t. You actually have options. And sometimes to growing that 20% mark might take you a long time, in which case your interest rate also went up. So evaluating options is really the best thing to do. And again, a lender is there to tell you the option. They’re not there to sell you. So if you ever find a lender that says to, you know, just do it into a loan, stay away, because there is enough people out there that actually, really, really are good at advising you and showing you the scenarios based on numbers. So look into a good lender and they can advise you 100%. I remember I got a referral and regardless of what you choose to do, I rather want to make sure you’re in good hands with people that I know and trust and will. Certainly. Adam sent me an email. I’m happy to connect. And while we’re on the topic of lenders, mistake number seven is not to evaluate all possible loan scenarios. Now we are talking about down payment, but there’s different loan scenarios. Sometimes there that makes it make sense to go one route over the other, knowing a lender that knows their products and also knows the ins and outs of the of a grant system, for example. First time homebuyer assistance is one of the biggest prop programs. Now, there’s a lot of, you know, little, little catch up along with it. It’s kind of like the catch 22. So make sure that you are talking to somebody that tells you all about it. And there’s a lot of little fine print. But it’s their job to make sure you are educated. Mistake number eight. Now we are getting close to the finish line. Mistake number eight is underestimating the actual cost of owning a home. Yes, you have principal and you have interest, which is for your bank. You also have taxes and insurance. This all together makes up your mortgage payment. So taxes as do insurance and your insurance company. But then what about maintenance and utility costs? There’s also costs that you want to consider when owning a home. Mistake number nine. And this one is a little bit awkward, to be honest with you. Assuming that you will get a gift from a relative, a friend, a parent, just to have them tell you, No, we don’t. You need to be honest. Have this conversation about getting a gift for a down payment. And then this way you can make sure when the time comes for you to purchase a home, all your ducks are lined up in a row and you do not have an awkward conversation saying, Oh, I wasn’t going to give you that money because that can put those dreams of homeownership to a crashing. And mistake. Number ten. I’m a big fan of savings, and it is the fact that many people are not aware of things where they can save. So I gave you a couple of ones for lenders, but then also your insurance. You can shop around for insurance, bundle and save as a big, big thing. Auto insurance was one. Typically, people love to check in and see if they can get a good deal if they combine those two. So if not your lender awesome recommendations to affordable people that can help you with insurance. Definitely check out your options. There are many to choose from. And as promised, I have a download for you of a couple loan scenarios that you can get. You can go right above here. It is www.bit.ly\9loansprogram. Check them out. There’s a ton of information there. Just keep in mind that there is more and, you know, always adding new ones, too. So reach out. If you are wondering if this is a new program that you heard about, is this real? Is this not real? We here to help. My name is Janine Sasso. I’m a local real estate agent in the northwest suburbs of Chicago.

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