7 Common Credit Mistakes First Time Home Buyers Make

Tweet

 

While the home-buying American machine and real estate lenders of the world are all pushing now as the best time to buy a home, many potential home buyers may want to hold onto their hats. It's true that it's a good time to buy a home. But just because it’s timely doesn’t mean you should run blindly into buying your first home. There are many things you need to consider before buying. Here are 7 credit mistakes first time home buyers need to be wary of.

1. Long Term Budget – Credit mistake number one for first time home buyers is not taking into account a long term budget. Yes you may just need that ottoman to go with your leather armchair but if you suddenly have a home emergency you could find yourself left deep underwater.
2. Hidden Costs – Closing costs, broker fees, repairs that need to be dealt with right away and other hidden bugaboos is another one of the "credit mistakes to avoid first time home buyers" often fall into.
3. Lender – Shop around for your lender and take competing offers to the other side to see who will bend over backwards for your business. If you are credit-worthy enough to enter into a mortgage you should be comfortable in fielding offers from multiple lenders. And keep in mind that sometimes you get what you pay for, even with interest rates. If local servicing after the loan is closed is important to you, then make sure your lender is local.
4. Mortgage Pre-Approval – If you’re not pre-approved for a mortgage many real estate agents will only look at you as slightly interested. Getting pre-approved also sets limits for what you can and can’t afford and where you should be looking.
5. True Value/Resale Value – While you don’t want to go into a  7, 15, or 30 year engagement thinking about your exit strategy, your homes only getting older so you should know the true value of the home you’re buying and what the resale value is upfront.
6. Neighborhood Watch – What is the current value of similarly constructed homes on your block? What about 5 years ago? You should know which way the neighborhood is trending before you buy in for the long term.
7. Credit Score – Before you enter into a long term credit engagement and maybe the biggest purchase of your life you should know where your credit score stands. Fixing up your credit for a couple of months and disputing inaccuracies could save you big money on your mortgage.

Don't fall into these 7 credit mistakes first-time homebuyers can fall privy to. Download "The Road to Mortgage-Ready Credit" at the button below to better prepare yourself for your first home. This free guide covers FICO scores, improving your credit and more so you can be a better-prepared first time home buyer. Download your free copy today.

(oops by Flickr user dingler1109)