• Home
No Result
View All Result
Money Monarch
  • Make Money
  • Money Management
  • Banking
  • Investing
  • Lifestyle
  • Real Estate
Money Monarch
  • Make Money
    • All
    • Make Money Apps
    • Make Money Online
    • Side Hustles
    • Work From Home
    68 Ways To Make Money Quickly In Multiple Sectors During 2020

    68 Ways To Make Money Quickly In Multiple Sectors During 2020

    23 Ideas For Kids And Teenagers To Make Money

    23 Ideas For Kids And Teenagers To Make Money

    I need money now

    23 Ways To Make Quick Cash When You Need Money Now

    make money driving for uber

    How To Make Extra Money Driving For Uber

    online jobs for teens

    13 Best Online Jobs For Teens To Make Real Money

    8 Places To Get Paid To Test Websites From Your Home Couch

    8 Places To Get Paid To Test Websites From Your Home Couch

    stay at home mother

    9 Best Stay At Home Mom Jobs To See Your Kids

    hobbies that make money

    16 Hobbies That Make You Money To Start Today

    create passive income with no money

    How to Create Passive Income With Zero Money

  • Banking
    • All
    • Certificates of Deposits
    • Checking Accounts
    • Savings Accounts
    Meet Credit Karma Savings – A New High Yield Savings Account With Even More Perks

    Meet Credit Karma Savings – A New High Yield Savings Account With Even More Perks

    woman writing about a money order

    How To Fill Out A Money Order Step by Step

    checkbook for checking account

    What Is A Checking Account?

    piggy bank savings account

    What Is A Savings Account And When Should You Use One?

    cd ladder money

    What Is A CD Ladder – Should You Get One?

    switch bank meeting

    How To Switch Banks Without Missing Any Payments

    what is direct deposit

    Direct Deposit – What Is It?

    Radius bank high yield account

    Radius Bank High Yield Savings Account Review: What You Should Know

    Checking Accounts Versus Savings Accounts: Similarities And Differences

    Checking Accounts Versus Savings Accounts: Similarities And Differences

  • Investing
    What Is A Bear Market?

    What Is A Bear Market?

    Stash App Review – What You Must Know Before Investing

    Stash App Review – What You Must Know Before Investing

    stock gift

    How to Give Kids A Share Of Stock (Christmas Gifts Or Other Holidays)

    Titan invest banner

    Titan Invest Review – Algorithm Investing Like A Hedge Fund

    thinking about betterment

    Betterment Review: Safe Investing With Robo Advisors?

    best short term investments

    8 Best Short Term Investments To Grow Your Money

    happy acorns review

    Acorns Review – Investing Spare Change With An App

    fundrise review apartment buildings

    Fundrise Review: Real Estate Crowdfunding Made Simple

    M1 Finance Review – The Greatest Way To Invest With “Pies”

    M1 Finance Review – The Greatest Way To Invest With “Pies”

  • Money Management
    68 Ways To Make Money Quickly In Multiple Sectors During 2020

    68 Ways To Make Money Quickly In Multiple Sectors During 2020

    Earny Review: The App That Monitors Price Matching And Price Drops

    Earny Review: The App That Monitors Price Matching And Price Drops

    What Is A Bear Market?

    What Is A Bear Market?

    12 Best Coupon Websites To Save The Most Money

    12 Best Coupon Websites To Save The Most Money

    Groupon Review – Online Discounts Without Clipping Coupons

    Groupon Review – Online Discounts Without Clipping Coupons

    filling up discounted gas

    16 Best Ways To Get Free Gas Cards and Discounted Gas

    how to get out of debt guide

    How to Get Out of Debt (Step By Step Guide 2020)

    Charlie Review – Text Message Budgeting Assistant

    Charlie Review – Text Message Budgeting Assistant

    on phone getting a personal loan

    How To Get A Personal Loan (Where To Look To Find One)

  • Real Estate
    buildium review

    Buildium Review – Is It Worth The Money?

    best property management software

    The Best Property Management Software (Ultimate Guide)

    13 Steps To Buy A House For The First Time

    13 Steps To Buy A House For The First Time

    3 Ways To Make 50K A Year Without Working (Using Passive Income)

    3 Ways To Make 50K A Year Without Working (Using Passive Income)

    how renters can save a house down payment

    7 Ways For Renters To Save For A Down Payment

    7 Ways For Renters To Save A Down Payment For A House

    7 Ways For Renters To Save A Down Payment For A House

No Result
View All Result
Money Monarch
No Result
View All Result
Home Money Management

7 Mistakes To Avoid As A First Time Home Buyer

Money Monarch by Money Monarch
January 1, 2020
in Money Management
0
This article may contain references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
0
SHARES
81
VIEWS
Share on FacebookShare on Twitter

First Time Home Buyer? Avoid These Common Mistakes

Most people start out their lives renting; moving from apartment to apartment, always on the hunt for lower rent and more amenities.

But at some point, you’re sick of paying some landlord every month to breathe down your neck while you live in a space that you don’t legally own.

And at this point, you (and your spouse/partner if you have one) are bringing home more bacon than you know what to do with.

So you/you guys decide that it’s time to begin house shopping.

But the home-buying process is not as simple as

  1. Find a half-decent place
  2. Send an application
  3. Provide documents
  4. Sign the lease/pay security deposit
  5. Move in

Home-buying is a much more complicated process…

A process filled with a seemingly endless number of mistakes to make and pitfalls to fall into.

Many first-time homebuyers fail to prepare adequately and it ends up costing them thousands of dollars and hours of wasted time.

If you don’t want to be out thousands of dollars and tons of time, avoid these rookie home-buying mistakes.

1.) Failing To Shop Around For Lenders

One of the most critical errors first-time homebuyers make is taking the first mortgage offer that comes their way.

Maybe they aren’t aware of large fluctuations in mortgage offerings, or maybe they’re just too lazy to browse the market.

Either way, failing to spend time looking for the best rate leaves tons of money on the table.

In fact, interest rates between lenders vary so greatly that you could save hundreds to thousands per year depending on the size of your mortgage! Checkout free websites like LendingTree to check out and compare different lenders as well as interest rates.

Homebuying is a long, complex process; you don’t want to cut corners out of laziness.

Take as much time as you need to find the best possible mortgage.

Instead of trying just one lender, visit at least 3. You’ll notice the difference in offers they’ll give you.

2.) Buying Something Outside Your Budget

A personal finance cornerstone is always living within your means.

When it comes to houses, this can be difficult.

Even more so when you find the most gorgeous house but see that its price tag is quite high.

Now, maybe the banks qualifies you for a large mortgage that’s typically be stretching your budget.

While this may be tempting if you think you’ve found your dream home, don’t do it.

Instead, look at what you’d pay monthly and see what you can afford.

Also, as we’ll mention later, there will be other home ownership costs to account for.

3.) Failing To Inspect Your Prospective Home

You’d be a fool to make such a large financial commitment without inspecting what you’ll be buying.

It is imperative that you cut no corners when it comes to inspecting your potential future home, as there are a lot of things that make up a house.

First, before inspecting the exterior of the building itself, take a walk around the land that’s part of the home. Take note of anything that could pose potential dangers, such as large trees being too close to the house (dangerous in a storm).

And don’t just do this when the weather’s nice; you’ll want to know that the drainage around the house is effective and allows water to stream away from the house rather than towards it.

Once you’ve walked the grounds, inspect the exterior for any cracks or flaws. This isn’t just for aesthetic purposes; cracks and holes in the wrong places could allow rainwater to flood areas of your home or provide little critters to create a home of their own inside.

Finally, go into the house and look at everything closely; leave no stone unturned.

Be liberal about recording damages. If you see anything that you think needs to be fixed up or that might affect the home’s value, make a note of it.

Damages that give you some negotiation room include

  • Cracks in walls/cabinetry
  • Termite infestations (can happen in the attic where there’s lots of wood)
  • Problems with electrical wiring

An important thing to note is if your seller is selling the home “as is”; if they are, you can’t do much if the house is dirty or has stuff the seller is too lazy to take with them.

But if they aren’t selling it “as is”, you can ask that the seller clean the place up and clear out their unwanted belongings.

Now, some damages aren’t cause for a lower price. For example, it’s expected that when new homeowners move in, they do any repainting. It’s not on the seller to paint the interior for you.

4.) Not Considering Closing Costs And Other Fees

The house’s sale price isn’t the only thing you’ll be paying upon initial purchase of the house. Closing costs – the fees you pay when the title of the home is transferred to you during closing – can be quite a hefty sum.

Some common closing costs include:

  • Application fee – You don’t usually pay this until you close on your new home
  • Appraisal fee – To learn the actual market value of the home
  • Attorney fees – If you used an attorney to help you traverse the buying process, you’ll have to pay them
  • Closing fee – Paid to the title company/escrow company/attorney to compensate them for overseeing the closing process
  • Home inspection – If you didn’t do this yourself
  • Prepaid interest – if interest accrues between closing and your first mortgage payment
  • Private mortgage insurance – If you didn’t put down enough, you’ll need to pay PMI; The first payment is usually due upon closing on the house
  • Transfer taxes – Paid when moving the title from the seller to you

Closing costs can run you up to 5% of your home’s price; so aside from saving for a down payment of 20%, you’ll want to pad your savings account with several thousand extra dollars.

5.) Not Ensuring Your Credit Report Is Clean And Strong

Houses cost a lot of money relative to most other purchases; thus, banks are taking large risks when you promise to pay back $250,000 and interest over decades.

You need to make sure your credit score is strong and your report is free from errors.

First of all, scan your credit report for any errors. Dispute all these errors as much as you can to clean up your report and give your score a slight boost.

Then, after you’ve been preapproved for your mortgage, don’t open any new credit accounts.

In addition, pay down some of your credit card debt and keep making your payments on time.

Lenders like clean and strong credit reports and they don’t like to see big changes in credit history as closing approaches, so do these things to ensure a smooth homebuying process. If your credit is not as high as you would like, think about trying to improve your credit score before you start searching for a home.

6.) Making Too Small Of A Down Payment

In a perfect world, there’d be no down payment.

Both you and the bank/seller would know right away whether or not you can afford to pay the full cost of the house.

Unfortunately, the bank/seller can’t see the future; to hedge against losses, they require a sizeable down payment on the house before you can get a mortgage.

Also, putting down a sizeable down payment demonstrates that you have the financial means to pay back the bank or seller.

Typically, lenders require a minimum down payment of 20% of the house.

That’s $60,000 for a $300,000 house.

Whoah; you could get yourself a luxury vehicle with your down payment.

But a down payment of 20% is the recommended minimum for a few reasons:

  • You’re much more likely to get a mortgage in the first place
  • You start off with significant equity in your home (aka you own 20% of your home already)
  • Your interest rate is lower
  • You have less principal to pay, meaning lower monthly payments
  • You avoid other costs and fees, like private mortgage insurance (PMI)

As you can see, putting such a large amount of money down could actually save you money in the long run.

Not to mention simplify the home-buying process a bit.

Still, if you feel like that down payment is pretty hefty, read this article we recently wrote detailing multiple ways to save on your down payment.

7.) Failing To Consider The Cost Of Owning A Home

happy couple bought a house

Ok, you’re all moved in!

Wait… you have to pay property taxes now?

And what’s this “homeowner’s association” that I have to send money to?

These are some costs you need to know of before choosing your first house.

As a renter, you probably didn’t even think about these until now.

You’re used to the usual:

  • Rent
  • Gas
  • Electricity
  • Water

But even these familiar costs change when you own a home.

And by “change”, we mean drastically increase as your house is probably larger than your former residences.

Some new costs you might/will need to pay are

  • Homeowner’s insurance
  • Property taxes
  • Internet (usually rental houses require you to get internet, so you might be used to this)
  • Lawn care (mowing, trimming, etc.
  • Upkeep (it’s your house, not the landlords!)
  • Homeowner’s association fees
  • Remodeling
  • Selling costs (if you eventually move out)

Owning a home is expensive, so make sure to have plenty of cash beyond your down payment and mortgage payments.

Home Buying Is Complicated… But Easier When You Know These Common Mistakes

Buying a house is not a quick and easy process; with every step you take, there are numerous financial and temporal pitfalls.

Avoid making these crucial errors when buying a new home, and you’ll have more peace of mind while saving many thousands of dollars and many hours of your time.

Previous Post

Blooom Review – A Robo Advisor To Help Manage Your 401(k) Account

Next Post

How To Manage Your Money (Without Stressing Out)

Money Monarch

Money Monarch

Money Monarch is a team that is in love with personal finance. We are on a mission to help you make the crucial decisions that will outline your financial future.

Next Post
happy about managing her money

How To Manage Your Money (Without Stressing Out)

piggy bank savings account

What Is A Savings Account And When Should You Use One?

What Is Inflation and How Do You Protect Your Money?

What Is Inflation and How Do You Protect Your Money?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Money Monarch

  • 8 Followers

Popular Post

  • donating plasma doctor visit

    How Much is My Plasma Worth? Ultimate Guide to Selling Plasma for Money

    0 shares
    Share 0 Tweet 0
  • 13 Ways Nurses Can Make Extra Money From Home

    0 shares
    Share 0 Tweet 0
  • 3 Ways To Get A Free CarFax Report When Buying A Car

    2 shares
    Share 0 Tweet 0
  • The Ultimate List of Blog Income Reports (100 Bloggers to Follow)

    11 shares
    Share 0 Tweet 0
  • How To Get Free Stocks – 8 Ways To Pocket Free Shares

    0 shares
    Share 0 Tweet 0

Follow Our Page

Follow Us

  • Looking for freedom from your job? Want to work from anywhere in the world? Learn how you can earn a full-time income by getting paid to write - even start your own blog! #blogger #blogging #paidtowrite #sidehustle #entrepreneur #entrepreneurlife #makemoneyonline #quityourjob
  • Want to make your money work for you? We
  • Are you a single parent of working hard to support your whole family? We
  • Trying to pay off never ending student loans or high interest credit cards? Let us help! This article explains how to track expenses and earn extra income to help you achieve financial freedom! #studentloans #creditcarddebt #financialfreedom #finance #sidehustle
  • Your health is important! Get rewarded for eating right and working out - win up to $10,000!  #weightloss #fitness #healthylifestyle
Facebook Twitter Youtube Pinterest Instagram

Money Monarch is here to help you save and make more money at home while at the same time helping you get your finances right

Pages

  • Privacy Policy
  • Terms of Use
  • Contact Us
  • About Us

Recent Articles

3 Ways To Get A Free CarFax Report When Buying A Car

3 Ways To Get A Free CarFax Report When Buying A Car

June 17, 2020
Meet Credit Karma Savings – A New High Yield Savings Account With Even More Perks

Meet Credit Karma Savings – A New High Yield Savings Account With Even More Perks

June 17, 2020

© 2022 MoneyMonarch.com

No Result
View All Result
  • Make Money
  • Banking
  • Investing
  • Money Management
  • Real Estate

© 2022 MoneyMonarch.com