Buying Your First Home? Don'T Make These Two Financial Mistakes

Have you decided to move on from your apartment and buy your first home? If so, you'll likely want to avoid making financial mistakes that first time home buyers typically make. Here are two things that you need to avoid if possible.

Not Getting Pre-Approved For A Mortgage

Unless you just won the lottery, chances are that you'll need to secure financing in order to purchase a home. However, many first time home buyers think that they can put off this part of the process until they finally find a home that they like. This is simply not true, and can actually cause you to lose out on your dream home when you find it.

The pre-approval process is not just for you to help determine how much the bank will lend you. It is also for the buyer to know if you can secure the money to purchase the home. If you are not pre-approved by a bank, you may not be able to get an offer accepted by a seller.

Of course, it takes a while to get a mortgage pre-approval from a lender. If you have multiple people making an offer on a hot home that has just been put on the market, you may lose out on the home due to other buyers that have their finances in order. Having a pre-approval letter can be what sets you apart from other buyer that are simultaneously making an offer.

Not Deciding On Your The Payment Early In The Home Buying Process

When purchasing a home with a mortgage, you'll also need to decide on how much money you are going to put down on the home as a down payment. The down payment will take a significant chunk of your savings, and you want to have money left over to perform repair or make upgrades after you move in. The down payment can also play into what kind of interest rate you will pay, and if you owe the lender private mortgage insurance for providing a small down payment.

Make sure you know how much money you will spend on a down payment by considering all of these factors. This can let you know if you could afford a home that needs some work done to it by having a small down payment, or if you are able to put more money towards the down payment to save on your mortgage.

Work with a FHA mortgage lending broker to avoid making first time home buying mistakes.