Realtors and new home consultants with San Joaquin Valley Homes hear it all the time. “I want to buy a home, but… can I afford to buy new and is it the right time?” First-time homebuyers have a lot of questions and insecurities. As a homebuyer in the Central Valley, you can avoid costly pitfalls and buyer’s regret. If you think you can’t afford to buy a new construction home or aren’t sure what size of a home is right for you, work with an experienced local new home builder such as San Joaquin Valley Homes.
According to an article by U.S. News & World Report, every prospective homebuyer should check their credit report and score, get preapproved for a loan, create a long-term budget and budget for all the expenses of home ownership before delving in. But especially if you’ve never bought a home before, here are some tips to help you avoid the most common blunders.
- Thinking you don’t deserve new
One major mistake first-time homebuyers make is thinking they can’t afford a new construction home. Some people feel they don’t deserve to own a new one because of ingrained thinking about roughing it with a humble starter home or foreclosure. In terms of saving money, new construction often comes out ahead compared to fixer upper homes. According to the U.S. News article, some buyers feel duped when they buy an older home only to find that it needs tons of expensive repairs. With a new home, you often save on utility and maintenance bills due to new, energy-efficient features.
- Running up debt after preapproval
According to an article by bankrate.com, another mistake homebuyers make is getting a new credit card or car loan before closing. Experts warn potential buyers not to take out car loans between the day you apply for a loan and the day of closing. Changing jobs and charging up credit cards are also big mistakes after receiving pre approval on a mortgage. In other words, if you want to buy new furniture for your beautiful new home, wait until after the closing.
- Buying as a couple at the wrong time
Whether you want to buy a home with a partner before you get married or after you get married, it’s all up to you. However, don’t make the rookie home buyer mistake of buying a home with someone else unless it’s the right step to take in the relationship. A recent report by The Associated Press, advises young couples to create a financial plan before living together. U.S. Census Bureau reports show the number of couples living together is up 1.7 percent to 7 million compared to last year. Experts recommend unmarried couples buying a home together hire an attorney to draw up a purchase contract that outlines the amount of money each person will contribute and a plan in case of a breakup.
- Choosing the wrong mortgage
Another common mistake homebuyers make is choosing a mortgage they later regret. Some of the popular mortgage options include a 15-year fixed rate or a 30-year fixed rate as well adjustable rate mortgages that start with a 5-year fixed rate. Consider how many years you intend to stay in the home as well as your own age and financial goals. A recent piece by Investopedia suggests homebuyers who belong to Generation X (born between 1965 and 1980) consider a 15-year mortgage so they pay off their mortgage by retirement. Ask your lender to crunch the numbers for you so you can compare and contrast the mortgage payment and interest savings on various mortgage options.
Other tips when you want to buy a home in California include looking into special first-time home buyer programs that require a low down payment. If you can’t afford to put down 20 percent, don’t feel afraid to ask parents for help because a lot of your peers are doing the same thing. Finally, to sidestep buyer’s remorse, avoid buying the smallest floor plan available to save money. In a few years, you will likely appreciate the added square footage or spare bedroom.
At San Joaquin Valley Homes, we have a variety of exciting floor plans in several different neighborhoods in the Central Valley. For more information please contact us.