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5 Big First-Time Buyer Mistakes to Avoid When Purchasing a Home in Texas

September 10, 2021 | By Reef Merhi
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Many first-time homebuyers are excited to finally buy their dream house, but it can be a daunting process. If you're looking for your first home in Texas, it's important to understand the mortgage process and how mortgage companies work, your credit score, and who qualifies for FHA loans. Overlooking these things or making critical mistakes can delay your financing or closing. 

In this blog post, we'll discuss five mistakes first-time homebuyers should avoid when looking for their dream home in Texas.

Happy family after buying new house

1. Not Planning Your Budget 

Before you get too excited about the houses you see for sale online, have you mapped out your budget? Buying a house is different than looking for a new apartment or home to rent. Homebuyers deal with many different expenses along the way to homeownership, and it's important to plan that out in detail before looking at houses you can't afford. 

Your budget must include an accurate assessment of your current finances, including your debt-to-income ratio and the minimum credit score required to qualify for an FHA mortgage or other financing. If you're not sure about all of the costs that go into buying a house, work with mortgage companies in Texas to learn about different fees, closing costs, and other aspects of the home buying process that require payment before closing. 

2. Estimating the Wrong Down Payment Amount

Not putting enough down on a new house can leave you with high monthly mortgage payments or challenges finding the right financing options or FHA loans. However, it's no longer true (in most cases) that homebuyers need to put 20% down to qualify for some conventional loans. 

The right down payment amount tells sellers (and the seller's agent) that you're serious about buying the house. It also tells lenders that you're financially able to keep up with monthly mortgage payments and makes you more attractive to different mortgage options

It's essential to take the down payment amount seriously when planning your home-purchasing budget. The right amount can help you become someone who can qualify for an FHA loan or help your mortgage team find the best options for your first home purchase. 

3. Not Taking Advantage of First-Time Home Buyer Programs

Did you know that incentives exist for first-time homebuyers? In addition to an FHA home loan, these programs can help reduce your out-of-pocket costs or reduce the amount you need to borrow to get into your first home. However, if you're not sure what to look for or how to apply them during the financing approval process, you could miss out! 

To make sure you have access to every available incentive or down payment assistance, the best mortgage companies Texas offers can help you research your options and qualify for the best incentives. There's no reason to pay more for your first house than you need to! With the right information and guidance, it's possible to afford the house you've always wanted and enjoy a better home buying experience. 

4. Emptying Your Savings

We talked about planning your budget before getting too far into your home buying journey. However, emptying your savings into your first home should not be part of your budget! 

Saving for your down payment and your first home purchase is important to get started on the right footbut putting all of your savings into a house can be a detrimental financial decision. Without any cash reserves, you aren't prepared for the ongoing costs of homeownership. If an emergency maintenance situation takes place after you move in, but you don't have the cash to fix it, you're at risk of going into debt to pay for costly repairs or delaying critical fixes until you rebuild some savings. 

Reevaluate how much home you can afford and how to save an appropriate amountseparate from your personal savingsto get into the ideal home for your budget. 

Cropped view of mortgage broker holding paper house and keys near wooden blocks isolated on white

5. Underestimating the Cost of Homeownership

Buying a home is only the first part of your homeownership journey! After closing on a new house and completing the financing through VA loans or a Texas FHA loan, you're in a long-term commitment with a significant asset that requires ongoing care to keep you and your family safe and happy. 

Make sure you estimate and plan for ownership costs, including:

  • The monthly mortgage payment
  • Utilities
  • Homeowners insurance
  • Preventive maintenance
  • Emergencies
  • Significant updates (like an eventual roof replacement)

Being prepared for these responsibilities is a smart way to experience success with purchasing your first home! 

Work With One of the Best Mortgage Companies Texas Offers to Avoid Mistakes

The first-time homebuyer experience can be a frustrating and stressful one if you don't know what to expect. There are many details involved, from finding the right house to budgeting for your down payment and financing your mortgage loan! 

If you're not sure how to avoid the mistakes we've mentioned here or where to find help along the way, Texas United Mortgage is here for you! We work with individuals every day who need guidance on their homebuying journey to make it as smooth as possible. For more information about how we can help, reach out to us today!

What else should first-time buyers know (before closing on a home)? Find out in our free resource, the "First-Time Homebuyers Guide!"

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