Are there any dos and don’ts if you are a first-time homebuyer in Ohio? Like most cities in the United States, Ohio has a fast-growing real estate market, with high buyer demand. A first–time home buyer is any buyer that is buying a home for the very first time or a person that has not owned a residence within three years. As exciting as it is, first–time home buying is stressful also. In many cases, people buying a home for the first time tend to make mistakes that they are later left regretting. To make first–time home buying easier and less stressful, buyers should get tips from knowledgeable sources to avoid these mistakes. Here are some of the mistakes first–time home buyers should avoid.
Considering only one lender
Frequently, first–time home buyers tend to get a mortgage from only one lender usually, the first one they talk to. It is always better to shop around and consider more than two lenders and mortgage brokers. This gives first-time homebuyers a basis for comparison of mortgage rates, loan terms, and lenders’ fees.
Failing to set a budget
Most first-time homebuyers start looking for homes before knowing what their budget can allow and before applying for a mortgage. Buyers should first talk to a mortgage lender and get pre-approved for the mortgage before choosing their homes, as a first-time buyer, this will help you avoid looking for homes that you cannot afford. Being approved for a mortgage is a sign that the buyer is serious which is a sentiment shared by Alfredo Arteaga, a loan officer with Movement Mortgage, “Before you fall in love with that gorgeous dream house you’ve been eyeing, be sure to get fully underwritten pre-approval.”
Saving less for down-payment
Most first-time home buyers usually don’t save enough and end up draining their savings on down payment which is usually 20 percent and closing costs. Buyers tend to use all their savings on the down payment to avoid paying for Private Mortgage Insurance which is not the best idea according to Ed Conarchy, a mortgage planner and Investment advisor, “Some people scrape all their money to get the 20 percent down payment so they don’t have to pay for private mortgage insurance, but they are picking the wrong poison because they are left with no savings at all”. The best option for a buyer is to have an emergency fund to avoid depleting savings.
Being more concerned with the house than the neighborhood
A good house doesn’t mean a safe and good neighborhood. A buyer should find a place where the culture and values correspond to theirs. Buyers, with the help of real estate agents, should track down and survey the neighborhood aspects that best suit the buyer.
Rushing the home buying process
Buying a home is not an instant deal, it is a process that requires enough time, especially the mortgage process. The buyer might not be able to save enough for closing costs and down payment if they rush the process which might cost them later.
Obtaining the wrong kind of mortgage
There are different types of mortgages, mainly Fixed and adjustable mortgage rates. In the home buying process, many buyers prefer the fixed mortgage rate which explains the popularity of the 30-year fixed-rate mortgage as it has a lower month-to-month payment and demands less cash upfront. however, as good as it may seem, there is a catch, unfortunately, the buyer has to pay more interest. Buyers should preferably use a 15-year fixed-rate mortgage.
The good news to any buyer planning to buy a home in Ohio for the first time is, Ohio Housing Finance Agency (OHFA) has first-time homebuyers programs. These include Conventional mortgage, Federal Housing Administration, United States Department of Agriculture, and Veterans Affairs programs. All these programs aim at making homeownership for first-time homebuyers more affordable by; offering low mortgage rates, assisting in down payment, tax credits, and financing buying and renovation of homes for buyers.
Buying a home is a dream come true for first-time homebuyers. To make this dream come true, buyers have to be informed and understand what’s happening in the real estate markets. They, therefore, need to work with reliable and eligible real estate agents, lenders, banks, and sellers. Looking forward to buying your first home in Ohio? Not sure how to go about it? It doesn’t have to be stressful! Reach out to Julius Cartwright today and find out more!