Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

First-Time Home Buyers' Common Mistakes Can Come with a Price

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

First-Time Home Buyers' Common Mistakes Can Come with a Price

Article excerpt

First-time homebuyers face multiple challenges even before they get the house keys: getting approved for a mortgage, finding the right agent, searching for the perfect home and staying within a budget.

With planning, they can avoid mistakes that might jeopardize a deal.

Many decide to buy when they feel ready for a mortgage. But just because they can afford mortgage payments doesn't mean they can afford a home, says New York attorney Rafael Castellanos, a managing director at Expert Title Insurance.

"They have an idea of what their mortgage payment is going to be, but they don't realize there's much more to it."

Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs first-time homebuyers tend to overlook.

"Keep in mind property taxes and insurance have a tendency of going up every year," Mr. Castellanos says.

Home buying doesn't begin with home searching. It begins with a mortgage prequalification. Often, first homebuyers "are afraid to get prequalified," says Steve Anderson, owner of RE/MAX Benchmark Realty in Las Vegas. They fear the lender may tell them they don't qualify for a mortgage or they qualify for a loan smaller than expected.

"So they pick a price range out of the sky and say, 'Let's go look for a house.'"

That's a backward approach, says Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, Ill.

"You get preapproved, and then you find a home," he says. "That way you'll make a financial decision versus an emotional decision."

He also advises thinking of the house as a long-term commitment.

"If you have to switch jobs in a year or two and may have to move for the job, you should think twice," says Mr. Conarchy. "Ideally, you should picture yourself living in that house for five to seven years."

If you're new to the home-buying game, you'll need a reputable real estate agent, a good loan officer or broker and perhaps a lawyer. …

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