No matter how much money you have, no matter how financially savvy you are, and no matter how clear your vision is of the property you’re after, buying a home for the first time can be confusing, frustrating, nerve-racking and heart-wrenching — often, all at the same time.
For most home buyers, especially those with limited budgets and limited financial knowledge, the first-time home buying experience can be downright frightening. There’s a lot involved, it’s complicated, and the stakes are high. Consider, for instance:
- There are things you have to do months in advance of even starting to look for a home, such as tuning up your credit report. If you overlook this, you may find yourself unable to qualify for a mortgage, and stuck living where you are for another year or even longer.
- There are hundreds if not thousands of options for mortgage loans, and picking the wrong loan could cost you a lot of money five or 10 years down the road when you need it badly for something else.
Despite all of these preceding warnings, there is hope, and plenty of it. With research and by seeking advice from experienced home buyers, real estate professionals and lenders, you can soon become familiar enough with the basics of home buying to stay calm, cool and collected.
The infographic below, First-Time Home Buyers: Terminology and Mistakes 101, is a terrific place to start your research or make sure you’ve covered all the bases. In everyday language, the infographic explains fundamental terms that are confusing and sometimes confused (such as pre-approval and pre-qualification), and then goes on to point out big mistakes that are easily avoided if you’ve anticipated them.
Rightly, the infographic draws a lot of attention to cash and budget issues. If you’ve never owned a home, it’s hard to imagine how expensive it can be to own one. First-time buyers who buy “too much house” usually end up learning this the hard way; because they have so much cash tied up in a down payment and monthly mortgage payments, they cannot scrape enough together to pay for utility bills, roof repairs, a new dishwasher, patio furniture, new carpet and 1,000 other things that inevitably come up day after day.
If you overextend yourself on the purchase, what should be one of the greatest things in your life, your own home, will turn into a daily battle between you and your bank account. To make your home purchase a total success, start by reading what’s below.