First-Time Buyers Should Avoid These Common Mistakes

Doing anything for the first time can be tough, especially when it's as important as buying a home. As a first-time buyer, you will be bombarded by a seemingly-endless stream of information and advice from friends, family, and your real estate agent. Of course, not all advice is good; in fact, even repeat buyers can fall prey to common mistakes and misconceptions in their search for a place to call home. To help cut through the noise, Realtor Magazine recently wrote about three of the most common mistakes made by first-time (and repeat!) buyers. 

Failing to shop for the best mortgage rate

Research by NerdWallet shows that a full 50% of home buyers fail to look into more than one lender when applying for their mortgage. This might seem like a small mistake, but shopping around for even a marginally better rate can result in thousands of dollars in savings over the life of the loan. In fact, comparing rates between five different lenders, rather than just one, will save a home buyer an average of $430 in interest in the first year of a typical $260,000 mortgage alone.

Saving for a 20% down payment

Although the magical number of 20% is often used as a gold standard for a down payment on a home, this amount is neither required nor actually attained by the majority of home buyers. Data from the U.S. Census Bureau reveals that 71% of current homeowners say they made down payments of 20% or less, with nearly half (48%) of all homeowners reporting that they put down just 10% or less! Combine this with the fact that home prices are constantly rising, and delaying your home purchase while you try to save for a 20% down payment can end up being a serious mistake.

Expecting your home to be perfect

Although it would be nice to stumble upon your dream home the first time you buy, it is much more helpful to go into your home search with a strong willingness to compromise. Rather than search fruitlessly for a home that hits all of the wants on your checklist, focus on the most important aspects of the home. If a given listing fits your needs for location, price, and size, then it is certainly worth taking a closer look at. You can always work to improve the other aspects of the home over time!