3 First-time Home Buying Pitfalls to Avoid

Even in the wake of the economic downturn, Americans still kindle the dream of homeownership. The housing market has shown strong recovery over the last few years, and people are out looking for their next or first home in Indianapolis.

It’s a very exciting adventure. Buying your first home can be sign of accomplishment and indicate roots are settling in somewhere. In that excitement, many first-time homebuyers take misguided advice and bite off more than they can handle.

1 – Blow the budget.

With so much loan information floating around the Internet, it’s crucial for newbies in the market to get accurate and trusted information from a reputable mortgage lender. A trusted mortgage loan officer will paint the real picture about budget. You may be approved for more than you can actually afford in a monthly payment. You have to be realistic, or you’ll be house poor—and that’s no fun for anyone in the family! A good Realtor® will fully understand your budget and keep you on track with financial goals of your investment.

2 – Add additional debt in the home search or new home building process.

Many first-time homebuyers get so excited about the new life they envision in the new home. They start thinking of new cars, a hot tub and big screen TV. Once you are pre-approved for a loan, do not access additional credit lines unless guided to do so by your mortgage lender. The new car needs to wait for the new garage. More times than not, you’ll be tasked by your lender to lower your debt-to-income ratio prior to a final loan approval. Opening new credit lines could disqualify your loan completely or lower your approval amount.

3 – Have unrealistic expectations tied to the wish list.

Home improvement shows and Pinterest wet many people’s appetite for a new home with new and trendy things. The wish list gets really long from the inspiration. The truth is: most first-time homebuyers cannot afford every single thing on the wish list and the market just might not have it. An experienced Indianapolis Realtor will help you prioritize the must-haves and like-to-haves. This doesn’t mean you won’t find a house you’ll love; you just may need to sacrifice the gourmet kitchen until you can really afford it. Also, when the new home provides more living space than you’ve had before, don’t put too much financial strain on yourself trying to furnish the whole home on move-in day. Get comfortable with your new mortgage payment first.

First-time home buying done right.

Significant tax benefits accompany homeownership along with evidence of a historically sound investment. Enlist the help of an experienced real estate professional in your specific market. Too often, I’ve seen people recruit inexperienced Realtors and mortgage brokers—which can lead to sour first-time buying experience. Put your trust in professionals.

By Ted O’Donnell,