Intro: Becoming a first time home buyer is a dream come true. But a home buyer's inexperience can cause them to make some pretty big mistakes.
Take VO: The number one, most common mistake first time homebuyer's make is failing to look at their total house payment. There's much more to a mortgage payment -- like property taxes and insurance premiums. A $1,500 homeowner's policy can add $125 dollars to your monthly mortgage payment.
"A bigger house means higher maintenance, electricity ... maintenance costs as well as insurance and taxes ... and so on and so forth."
"That's what is making me short sale my place now. My maintenance is $530 a month ... it's almost like a mortgage."
"Don't go overboard thinking you're going to make money on the house. Look at it as a place to live and hopefully bring up a family in a good environment."
Did you find the perfect home at the perfect price? Did you get pre-approved to buy that house? If not, you're certainly not alone. Going house hunting before getting your financials approved is a mistake many first time homebuyer's make.
"Just kinda rushing, you know, I think, haste makes waste and I'm finding myself ... I'm probably going to regret moving too fast."
"You don't wanna go shopping for that million-dollar home when you're only qualified to the buy the $100-thousand dollar home, so it's best to be prepared in what you're going to be approved for, rather than getting your hopes up or step outside the boundaries of what you can afford."
Buying a home is the largest single investment of your lifetime. So, before shopping for a home, make sure you can actually qualify for financing by getting pre-approved.
Wipe out your entire savings to buy a home? Putting 20% down is a smart financial move when buying a home ... If you don't use all your savings.
When you have no savings and can't meet basic needs in other budget categories…you've overextended yourself financially. Experts agree that no house is worth the risk of living on the edge. So, either buy a more affordable home or look to into monthly mortgage insurance.
Want a new car to sit out in front of your new house? Of course you do, but don't buy anything until the home purchase is complete. In this tight lending environment, lenders pull credit report before the closing to make sure the borrower's financial situation hasn't changed since the loan was first approved. Any new loans or moves that show on your credit report can jeopardize the closing. A very tough lesson to learn, especially first timers.
"The most important thing is that you do have a roof over your head and that you feed your family, ya know. Because what happens on the outside of the house is not as important as what happens on the inside of the house."
TAG: To avoid first time home buying mistakes, visit Bankrate.com to arm yourself with the best financial knowledge. I'm Kristin Arnold.