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Virginia Roberts
Principal Broker
215A East Main Street
Wise, Virginia
276-328-0055
Your Local Hometown Agency
Serving All of Southwest Virginia
First Time Home Buyer
Buying a home, like anything you do for the first time, comes with a learning curve. Having useful information about what is involved in home buying--both around the home itself and financing--can make the process less stressful. Your Ridgeview agent has the knowledge and expertise to seamlessly guide you through the entire process.
Mistakes to Avoid
1. Hesitating to Ask for Information or Clarity
Research shows that about 90% of buyers do not know what to expect during the loan process, but many just do not ask questions. Not asking questions or having any wrong assumptions that go unchallenged can create problems as the transaction moves along.
Pro Tip: Ask questions! Lots of them. Expect your Ridgeview agent to provide an overview of the process, and guide your through your property search and purchase.
2. Not Investigating Down Payment Assistance Programs
Saving for a down payment is often the biggest challenge for first-time home buyers. You can qualify for a home loan with no money down or with a low down payment of 3%--or zero if you are a veteran. You may also qualify for down payment assistance through a local program that offers them. Government programs are available to help buyers with down payment assistance, low interest loans, grants, forgivable loans, deferred payment loans, and other incentives that help lower the amount you will need to borrow.
Pro Tip: Research assistance programs with local lenders for both in-house and government loan packages to see what type, if any, of assistance you might qualify for.
3. Failing to Build and Protect Your Credit Score
Your credit score is an important measure of creditworthiness that lenders consider when deciding whether to give you a mortgage and the interest rate they will charge you. Mortgage lenders focus on credit reports because they generally provide a comprehensive summary of the way you have managed your finances over time. A favorable credit score to buy a house is typically in the high 600s and 700s. Certain loans allow you to buy a house with a credit score as low as 500. The higher your credit score, the more favorable loan terms your lender will offer you.
Pro Tip: Make account payments on time/use automatic payments, keep accounts open, and avoid hard non-mortgage credit inquiries.ro
4. Shopping for Homes BEFORE Getting Pre-Approved
Shopping is the fun part, so of course you would want to get out there and start looking at homes. However, your search is going to be more focused--and more likely to succeed-- if you are shopping within your budget, which can be hard to know unless you have gotten either pre-qualified or pre-approved for a mortgage. In competitive markets, pre-approval is essential as it could help you shape an offer with confidence without overextending yourself.
Pro-Tip: It is recommended to have a conversation with your lender before your first property viewing to obtain your pre-qualification or pre-approval letter, which will let you know your house shopping budget and provide increased confidence in your offer to a seller.
5. Not Being Aware of Having to Pay Closing Costs
Buying a home comes with the costs that have to be paid at the time the sale is completed. These costs, called closing costs, include local property taxes for the remainder of the year, fees associated with the loan, and title insurance. The costs usually range from 2-5% of the home's purchase price, and can be negotiated, so they are shared with the seller.
Pro Tip: Once you find a home and apply for a mortgage, the lender is required to disclose all estimated fees and costs associated with the loan within 3 days of applying for the loan.
6. Failing to Negotiate Closing Costs
Closing Costs are always open to negotiation. Sellers are often willing to pay a share of the closing costs. Your Ridgeview agent and loan officer can help you identify areas for negotiation tailored to your specific lending needs, so you can bring less money to closing or to help you lower your monthly payment.
Pro Tip: Do not be afraid to negotiate. Your Ridgeview agent will help you craft a strategic offer that minimizes your closing costs.
7. Not Considering the Monthly Payment Before Making an Offer
Experts say your mortgage payment should not consume more than one third of your income to ensure you have money for emergencies and enjoying life. A home that falls at or below that threshold is considered affordable. There are many online sites that offer a quick estimate of your total monthly payment, including principal/interest, private mortgage insurance, property taxes, home owners' insurance and any homeowner association fee.
Pro Tip: Get a handle on what you can afford by talking to your lender or using online tools that will do the math for you. EE
8. Taking Rejection Personally
Not getting a home you put an offer on can be hard on some buyers. You may have already imagined furniture placement and your family in the home. If your offer gets rejected on a house where you have imagined your future, it can hit some people really hard. When this happens, remind yourself that home buying is a numbers game on some level. You might get lucky and buy the first home you set your sights on, but it is more likely you will view mutliple homes. The right home will present itself when the time is right.
Pro Tip: Working with your Ridgeview agent and being financially ready to act quickly and decisively when you see a home you want can help you buy the home of your dreams.
9. Buying More House Than You Can Comfortably Afford
Buyers may not realize the hardships that can come from buying a home too far outside their comfort zone. Just because you qualify for a $300,000 loan, "Are you going to be house poor? Be able to afford going to the movies? Will you have to eat ramen noodles everyday?" Your goal should be a comfortable scenario where you can have the house of your dreams that is within your budget and still be able to enjoy life.
Pro Tip: Get pre-qualified/pre-approved before house hunting, so you know your purchasing power from the get-go. Then search for homes that fall into that budget, setting you up for success rather than disappointment or hardship. E
10. Considering Only Turnkey Homes
Turnkey homes come at a premium and are likely to be the most in demand. Purchasing a fixer upper might help you get the location and/or square footage and layout you want without having to pay top dollar. While there is value in buying a move in ready home, buyers pay for that convenience.
Pro Tip: Lenders finance homes based on the home's current condition, not how much it will be worth once you have improved it, so be sure the home is priced right to qualify for a mortgage and afford the improvements.
11. Being Unwilling to Compromise on Home Features or Local
It is great to know what you want in a home, but having a long list of "must haves" that you are unwilling to let go of can leave you empty handed. Regardless of price point, it is difficult to find a property that checks all of your boxes. There is always a little give and take, so be clear on your search criteria and priorities. Your Ridgeview agent can help you adjust your expectations about what you can get for the location or expand your search out geographically. Do not make the mistake of waiting for the right one as prices continue to rise.
Pro Tip: Prioritize your housing needs based on how much you can afford, your current (and future) lifestyle, preferred home style/type, location/neighborhood, and any non-negotiable property amenities. Your Ridgeview agent can help you refine your search based on your priorites.
12. Writing Off Homes That Have Lingered on the Market
Sometimes homes get passed over for benign reasons--an offer fell through because the buyer could not get financing, for example, or appraisal was lower than asking price, causing the home to end up sitting on the market for a while. Some buyers might think there is something wrong with the home and will not even consider it even though it could be a good fit at the right price.
Pro Tip: There is opportunity in the homes that came on the market at too high in price, have bad photos or are poorly staged or not staged at all. Your Ridgeview agent will advise you to look for new inventory but also consider older inventory--there is opportunity in both.
13. Waiving Home Inspections
Some buyers are so eager to close a deal on a home that they are willing to waive an inspection that could reveal serious problems with the home, including foundation damage, mold, faulty heating systems, and more. Some find out after buying the home, however, that they have bought a money pit. You Ridgeview agent has a network of home improvement professionals who can give you an idea of what might be involve in improving the home and provide cost estimates.
Pro Tip: Do not waive an inspection, except in extreme circumstances. If you are considering a home that needs repairs or updating, consider bringing a contractor to the inspection to give you an idea of what repairs might cost
14. Not Choosing a Home Based on Things that can Be Easily Changed
It is hard to find the perfect home, and even harder if your list of wants is long and specific. A home that has everything you like/want may come at a premium. Consider homes in which you would be able to make small changes after the sale to bring the home up to your expectations.
Pro Tip: Instead of waiting and continuing to be outpriced by the market, look for a home that has all the things you want the are really expensive to change or can't be changed, like lot size. Your Ridgeview agent can help you identify listed properties that might serve this purpose.
Your Local Hometown Agency
Serving Southwest Virginia
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