Our Blog

In part one of this two-part blog series, we went over some of the common mistakes made by first-time homebuyers and how you can avoid them if you’re in this position. While the mortgage loan world may seem daunting for those who have not been through it before, the right guidance and adherence to the simple steps of the process will help you obtain the mortgage you need to buy the home of your dreams.

At Primary Residential Mortgage, we’re here to provide both that guidance and a wide variety of available home loan programs for first-time buyers. We’ve assisted numerous first-timers with this process, including steering them clear of several potential first-time buyer mistakes – here are a few other such pitfalls to avoid as you move through the mortgage application and approval pipeline.

Exhausting Savings

For most first-time homebuyers, you’ll be saving up money over a period of time to spend on the down payment and other important mortgage-related areas. It can be tempting to pull the trigger on a purchase the moment you’ve compiled enough savings to do so – but this is often a mistake.

It’s important to realize that, on top of the down payment and initial monthly payment amounts, home purchases come with additional fees and expenses. It’s important to have some savings left over for these areas, plus for expected repairs and improvements you’ll be responsible once you own the home. Between these areas and maintaining an emergency fund, we recommend building your savings to a point a bit above what you’d need for the down payment alone before moving forward.

Closing and Related Issues

There are a few issues that may show up near the end of the mortgage process, including:

• Closing cost underestimation: One of the key areas of additional expense we referred to above? Closing costs, which include paperwork, lawyer fees, title change costs and more. You’ll need to have funds available for these costs up-front.
• Escrow issues: Escrow is money put down in good faith to show the seller you’re serious, and will eventually go to property taxes. It’s important to understand properly.
• Discount points: For savings on your mortgage rate, you may be able to utilize what are called mortgage points – but only if you’re aware of them and how they work.

Miscalculations

Once you’ve decided on a mortgage and a home to move forward with, it’s vital to make the proper calculations on monthly payments. These include not only the mortgage itself, but also property taxes, utilities, HOA fees and any others present.

No Home Inspection

Finally, it’s an absolute must that you have a home inspection carried out by a third party before competing any sale documents. Such a third party inspector can locate issues you may have had no clue were present, allowing you to return to the seller and ask for repairs out of their end before the sale is completed – or a reduction in price to account for you paying for such repairs.

For more on how to avoid first-time homebuyer mistakes, or to learn about any of our home loan programs or mortgage rates, speak to the staff at Primary Residential Mortgage today.

*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.