Buying a house can be overwhelming and exciting at the same time, especially if you’re a first-time home buyer. There are certain mistakes to avoid that could have costly consequences. Consider these four mistakes to forego, and how a real estate lawyer can help you during this process:
Depleting Your Savings
Many first-time home buyers believe they have to put down a 20% down payment in order to buy a home. While 20% of your home’s total cost is an ideal down payment, it’s not necessary. Certain loan programs like the FHA loan requires roughly 3.5%, and even that can be thousands of dollars. Make sure you don’t deplete your savings to increase your down payment.
Changing Your Credit Score
When you’re approved for a loan, the underwriter will reference your credit score and current debt-to-income ratio. Once you’ve been approved for a certain amount, you need to do everything possible to keep those numbers the same until the house is officially yours. Even small credit inquiries from a furniture store or new credit card can disrupt the home buying process.
Applying for the Wrong Loan
As a first-time home buyer, you have a variety of options for loans (and there are several that give first-time home buyers a break)! There are loans available such as the USDA, VA, or FHA loan that requires 0%-3.5% down payments. Your loan officer will be able to guide you through this step.
Not Talking to a Real Estate Lawyer
Finding your dream home is exciting! But first-time home buyers don’t always know what to look for in certain legal documents or understand the home-buying process. A real estate lawyer can walk you through these steps and ensure costly mistakes are avoided and you get the best deal possible.