1. Not getting pre-approved before house hunting
If you don't know how much you are approved for, you won't know what size house you are able to buy. You may end up waisting time looking at houses that are outside your budget or possibly below what you can afford.
2.Thinking you need 20% for a downpayment
There are multiple loan programs available, each one with different down payment requirements. Paying 20% down on a Conventional loan, for example, will eliminate your Private Mortgage Insurance, but it's not necessary.
3.Not looking into USDA, VA & FHA Loans
Not all loan programs are created equal and some may suite one borrower better than another. For example, if you don't have money for a down payment and want to live in a rural area, a USDA loan with 0% down may work for you. If You're a military veteran, look into saving with a VA loan which also offers 0% down.
4.Depleting your savings to pay your downpayment & closing costs
You don't want to spend everything you have in your savings account to pay for your downpayment and closing costs. Make sure you still have reserves in your account in case of emergencies.
Look into down payment assistance programs, downpayment gifts from family or friends, & ask your realtor to add seller concessions to your contract to get the seller to help pay for some of your closing costs
5.Applying for credit before the loan is closed
It could be tempting to buy new furniture for your new house, but be aware that your credit could take a hit and potentially disqualify you from getting your home loan. You want to avoid any drops to your credit score & prevent any debt ratio increases to push you beyond the approved loan limits.
6.Paying cash for rent
Some borrowers may have to verify their rental history by providing their lender with proof of rental payments for 12 months. This can't be done with cash. So, remember to pay with a check, cashiers check, money order or direct deposit.
7.Underestimating the costs of owning a home
There are some expenses you don't have to worry about when renting. It can be easy to forget that the mortgage payment is the only added expense to a new homeowners budget. Home owners association fees, home insurance, and increased utility bills are just a few added expenses to keep in mind.
8.Skipping a home inspection
Home inspections aren't required for a mortgage loan. Some homebuyers will choose to skip this added step to save money. In doing so, however, they may be setting themselves up for spending even more on future repairs that could have been avoided. Having an inspection completed will ensure that everything is up to code, and there are no problems with items such as the foundation or the roof.
Make sure you're present during the inspection so you can speak to the seller and your agent about any repairs that need to be made before moving forward.