PARAMOUNT MORTGAGE - LENDER'S BLOG

First-time homebuyers are filled with excitement when they start their journey to find the perfect first home. However, financial journalist Amy Fontinelle says that many of these buyers should avoid making these common mistakes:

Not knowing what you can afford - Knowing what the bank says you can afford and what you know you can afford may not necessarily be the same. Looking at homes that are outside your price range can put you in the dangerous position of trying to stretch beyond your financial means.

Skipping mortgage qualification - Get preapproved for a loan before placing an offer on a home. If you sign a contract and discover later that the bank won't lend you the amount you need or with the terms you expected, your deal could fall through. You may have to forfeit any contract deposit money that you put up.

Failing to consider additional expenses - As a homeowner you'll have additional expenses on top of your monthly payment. You'll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like replacing the roof or furnace).

Not thinking about the future - Neighborhoods are subject to change. Ask questions and pay attention to the information that is available to you:

What kind of development plans are in the works for your neighborhood?
Is your street likely to become a major street or a popular rush-hour shortcut?
Will a highway be built in your backyard in five years?
What are the zoning laws in your area?
Is there is a lot of undeveloped land? What is likely to get built there?
Have home values in the neighborhood been declining?

Compromising on the important things - Don't get a two-bedroom home when you know you're planning to have kids and will want at least three bedrooms.

Neglecting to inspect - Keep your feelings in check until you have an inspection and get a full picture of the house's physical condition and the soundness of your potential investment. This will help you avoid making a serious financial mistake.

Being too picky - Go ahead and put everything you can think of on your wish list, but don't be inflexible if you don't get everything. You may have to live on a busy street, accept outdated decor, make some repairs to the home or forgo that extra bedroom if your funds are limited.