Common First-Time Home Buyer Mistakes

1. They don’t ask enough questions of their lender and end up missing out on the best deal.  Here are some questions that would be good to know when shopping around for a lender:

• What are the most popular mortgages you offer? Why are they so popular?

• Which type of mortgage plan do you think would be best for me? Why?

•  Are your rates, terms, fees, and closing costs negotiable?

• Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20 percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of equity by paying down the loan.)

• Who will service the loan — your bank or another company?

• What escrow requirements do you have?

• How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if it drops during this period?

• How long will the loan approval process take?

•  How long will it take to close the loan?

• Are there any charges or penalties for prepaying the loan?

• For more commonly asked questions click here.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right agent who’s willing to help them through the home buying process.

4. They don’t do enough to make their offer look appealing to a seller.

• A few things to spice up the offer would be: a quick closing, fewer contingencies, large down payment, more earnest money, etc.

5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.