3 Mistakes to Avoid When Buying a Home

Buying a house is a dream for many families, but it can be a challenge in today's market, with mortgage rates rising.

Why It's So Important to Shop Around for the Right Mortgage

Just last year, the average mortgage rate was 2.96%. However, the rate was around 5.8% in the first week of September 2022. Home buyers must be savvy in finding the right mortgage. While Coastal always has your back by offering members competitive mortgage rates, there are also other ways you can maximize getting a great deal on your mortgage.*

If you're thinking of buying a house soon, an interview I had with author Jon White would be beneficial to listen to. On the podcast, he shared the mistakes made when purchasing his first house and how he used those lessons learned for his next home. The results were night and day.

These lessons can help you become a savvy buyer and make it easier to find the right mortgage for you.

Mistake #1: Rushing to Become a Homeowner

Jon admitted the first time he bought a home; he was ill-prepared. "The biggest mistake I made ... was that I just rushed the process. I got house fever. And when you get house fever, you just go with it. And I didn't put anything down on the house."

How to fix it: I admit, it's not exciting, but taking a step back and evaluating why you're interested in becoming a homeowner and what you're looking for in your future can be a fantastic way to verify this is the right decision for you.

Another way you can prepare is by becoming familiar with the process and getting a ballpark estimate of upcoming expenses. While there are mortgage loan options that don't require a down payment, you still need to be saving up for your house. Why?

Besides a down payment, there are other expenses involved with buying your home, such as:

• Home inspection
• Lender fees
• Appraisal
• Title search and insurance fees

As you compare lenders, make sure they walk you through their paperwork.

Mistake #2: Just Accepting the Budget the Lender Gives

Looking back, Jon noted another huge mistake he made, he didn't verify the numbers given to him.

"I just told the banker, okay, this is my income, and they told me, okay, you can probably afford a house in this range. I went with it."

How to fix it: Buying a home you can afford is more than just being able to cover the mortgage payments.

You don't want to be in a situation where your budget is so tight; there's no wiggle room for regular home maintenance, savings for other goals, or just being able to afford a nice vacation.

Run the numbers to find the right amount of home you can comfortably afford. You’re the one who has to pay this mortgage for the next few (or more) years; make sure you're okay with it.

Mistake #3: Not Paying Attention to the Market

Finally, as he reflected, Jon mentioned that his timing was off with his home purchase. John bought his condo in 2006 before the real estate bubble burst. Unfortunately, he found himself about $20,000 underwater with his home when it did. Thankfully, Jon, had some savings stashed away, but it was enough to convince him he needed to switch up how he approached buying a house.

How to fix it: Having an experienced, knowledgeable, and trustworthy real estate agent by your side can help you get a clear view of the market. You'll better understand what to expect, and they can uncover gems of neighborhoods you may not know about.

Speak with a Mortgage Loan Specialist

Having a team behind you in buying a house can not only make it less stressful, but they can also work with you in finding a home within your budget.

Did you know there are many programs out there that can help first-time home buyers? Set an appointment to speak with a mortgage specialist to see what mortgages you qualify for in your budget. They can also assist you in exploring options such as a HomeReady® Mortgage.

Have a Local Real Estate Expert Help You with Your House Hunt

The costs to buy and sell a home can add up quickly, so Coastal members looking to save without sacrificing expertise have the option of working with the Daymark Realty team. Daymark has locally based and experienced realtors ready to work with you to find a home you love within your budget.

Visit a local branch or call Coastal to see how you can get a great mortgage rate!