Purchasing your first home comes with many big decisions. It can be as scary as it is exciting. So, there is always a possibility to get swept up in the whirlwind of home shopping and make mistakes which could later leave you with buyer’s remorse.
Even if you have decided to opt for an FHA loan with a 3.5% down payment, a small mistake can restrict you from fulfilling your dream. To lower any such possibility, and help you go a step closer to your dream, here, we have listed down a few mistakes that most homeowners make and why you should avoid them.
- Talking to only one lender
It is a big mistake. First-time home buyers often get a mortgage from the very first lender they talk to. The more you shop around, the better basis for comparison you will have to make sure you are getting a good deal and the lowest rates possible. Instead, you should shop around with at least three different lenders, and ask them whether they are ready to lend you the home loan amount with a 3.5% down payment. If one lender is not ready, another one will be. So, you can easily get approval for an FHA loan with a 3.5% down payment.
- Moving too fast
Purchasing a home can be complex, especially when you get into the weeds of the mortgage process. Rushing the process means you may fail to save enough for a down payment or make informed decisions. To avoid this mistake, you should map out your homebuying timeline at least a year ago. Keep this in mind that it can take months or years to repair poor credit and save enough for a sizable down payment. You should work on improving your credit score, pay down debt, as well as save money to put you in a stronger position to get preapproved.
- Buying more house than you can afford
It is easy to fall in love with the house that is beyond your budget. But overextending yourself is not a good idea as it can put you at risk if you fall on tough financial times. Instead, you can calculate how much home you can afford and based on that move on. Are you wondering how much home you can qualify for? Using a custom-designed mortgage calculator for the FHA Loan program can help you with this.
Consider this real-life example, where a house was sold on 12/10/2019 at 3614 Braewin Ct, Houston, TX 77068 for $267,500 with 5 bedrooms and 3 bathrooms and the size of the home is 3,613 Sq Ft. With an FHA home loan program, the down payment would be only 3.5% or $9,363 and the loan amount is $258,138 and the cash to close including closing costs could be $12,009.01.
So, save yourself from committing these mistakes when looking for an FHA loan and ensure the approval with a 3.5% down payment.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.