Mistakes First Time Home Buyers Will Make in 2022

Part of growing up is making mistakes, but that doesn't mean you shouldn't try to avoid them when purchasing your first home. Here's the mistakes I see a lot of first time home buyers making this year.

Not Taking Advantage of FHA Loans

As a first time home buyer, you may qualify for an FHA loan. This loan type only requires a 3.5% down payment versus the 20% down payment of a conventional loan. This can only be used in your first home purchase, so now is the time to use it!

So what is the catch? Borrowers who don't put 20% down will have to pay mortgage insurance to protect the lender. There is also a stigma behind non-conventional loans that they are less likely to close or will require more repairs from the sellers. Due to this, a lot of sellers and Realtors alike will favor conventional loans over FHA. Unfortunately, FHA buyers will likely have to make more offers than Conventional buyers. However, FHA loans are still great loans and imagine how much sooner you could purchase a home if you didn't have to save an extra 16.5%.

Weigh the pros and cons with your loan officer while you have options to choose from!

Picking Your Realtor Based on Your Parents

As someone who is always asking my parents for advice this one is hard, but important. Buying a home can be a long and stressful process, especially this year. You will be spending a lot of time with this person and I don't know about you but I don't want to spend every weekend with people I don't like.

Chances are your parents know an awesome Realtor, if not several, but that doesn't mean they should be the person helping you purchase your first home. There's also a good chance your parent's Realtor bought their first home thirty years ago. Experience is amazing, but relatability is important too. Being a first time home buyer in this market is hard, and I want to work with someone who has shared a common experience with me. As a young millennial, I will relate on a personal level more with someone who is around my age on their first or second home, than someone who owns a million dollar home, a couple vacation homes and maybe some investment properties.

Not Keeping an Open Mind

I'm here to break the news to you that your first home will not be your dream home. It won't have everything on your wishlist and you will have to make compromises. I know, it sounds harsh but it's true. In a competitive market like we have in the Triangle sometimes you just have to get into a house. You can always sell it in a few years and use the equity to purchase your dream home, but waiting for the perfect home to pop up is just going to make you pay in the long run. The home you buy should meet all your needs, but you will probably have to compromise on some of your wants.

Waiting to Buy

I hear it every single day "I'm waiting for the market to crash." I won't tell you that it won't because no one knows that, but I will tell you that if it doesn't the longer you wait the more you'll pay. Not only have home prices in the Triangle been on the rise since 2008/2009, but we still have historically low interest rates and are only expected to go up as well. This means homes will cost more, and you will be approved to purchase less. You're also continuing to throw away money on renting for another year, and missing out on equity gain as home values increase. Not a great combo right?

Over the past few years we have learned that anything can happen, and but it sure is a risky game to play by waiting for a potential crash.

Ready to purchase your first home in 2022? Call or text 828.550.2919 to get started!

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