The importance of owning a home does not escape the average person, but finding the right one should not be a challenge either. The market is full of people who buy and sell homes on a regular basis, but there are still many individuals that have yet to purchase a home of their own. At some point in time, a prospective buyer will make the determination that they want to own their own home — and that’s when they will need to understand how the financial process works.
1. Not Getting Pre-Qualified
Unless you are extremely wealthy, it is impossible to secure a loan without a lender who is willing to approve it. The ability to buy a new home will depend on how much you can borrow, but one mistake that new home buyers continue to make is failing to get pre-qualified before they go shopping for that new house. By getting themselves pre-qualified, they know ahead of time exactly how much their lender is willing to approve.
2. Underestimate Your Credit Score’s Importance
When we allow ourselves to slip down that slope of less than perfect financial health, we lose a lot of our buying power and inadvertently, a weak credit score emerges. Regardless of what we are buying, a new car, or a new home, we will be judged by our credit score at the time of the loan application, a fact that could seriously hamper our ability to make those purchases. These results can deter lenders from approving the loan or end up charging higher interest rates.
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3. Not Knowing What Mortgage Is Best for You
Deciding on whether to choose a 15 or a 30 year mortgage loan is probably one of the biggest decisions that we will make when we choose to buy a new home. The differences between the two products can differ tremendously, especially since they both have a different outcome. There are two basic results that could help choose the right plan, you are either trying to pay off your loan sooner with the 15 year plan, or you are trying to keep your mortgage payments low with a 30 year plan.
4. Not Knowing Your Budget
How many times have you heard someone say that they are having trouble meeting their budget? This is a problem that hits us all at one time or another. Budgets are probably one of the most valuable tools that we can have as responsible adults, but if you don’t include your mortgage payments in your budget, you could end up in foreclosure and ruin your credit score.
Buying a Home in Louisville, KY
When we venture into the world of home ownership, there is a line that we cross and it takes us from one level to another. If we don’t know the process, we could end up paying more than we should for our new home, but the bigger issue is that we could have done better. Rather than make a bad decision and messing up a good thing, first time home buyers would do better if they get some help from a local realtor. Contact us today and start searching for a home among our current listings:
