Avoid These 5 Mistakes as a First-Time Home Buyer

Uh, Patriot Nation, we've all made mistakes. I've certainly made more than my fair share. But when you're buying a home, it's going to be the largest transaction of your life. You understand that it every mistake you make can be very big and very costly. Sometimes these mistake even create the transaction to fall apart. So, I'm going to give you five of I think some of the biggest mistakes that you're going to be possibly making and hopefully we can smooth all through that. At the end, I'm even going to throw in a bonus mistake for you to avoid. And if all that's of interest to you, share this video with your friends and anybody that you think is going to be buying a home for the first time. And let's kick off this rodeo right now. Hi folks, I'm Kevin and I'm the mortgage patriot on your side, nestled here in the Hill Country above San Antonio, Texas, still serving all you proud Texans and all you great folks all around the country. So, yet another great and valuable video because we all make mistakes like I said at the beginning, but when you when you're talking about buying a home, you understand that it every mistake you make can be very big and very costly. I made some in my first purchase of a home, that's a maybe a video for itself. So, as we get into that content, if you would if you hit the like and subscribe, please. And that really brings up my content on YouTube. In fact, here's a companion video I'd like you to look at after this if you would. This is the five things that you must know or must do when you're buying a home. This video right here will be kind of the reverse of that. It's going to be the five mistakes you want to avoid when you're trying to buy your first or even your second home. So, let's get into that content right now. Okay, I'm putting this one first as what to avoid and that is do not open any new credit card applications. And conversely, do not close any existing credit cards. People are always thinking this is going to improve their scores. No, it actually hurts you because you want that history. credit scores are largely impacted by the tenure, the history of your credit relationships. So, if you close all these ones that have been perfectly performing, then all you're doing is ridding yourself of great history that will no longer be counted. And likewise, if you open up a new account, that new card doesn't have enough history on it yet because you just opened it to factor in and all it does is drag your scores down a little bit. So, that's the first thing to avoid. Don't open up any new cards and don't close any new cards. The second big mistake to avoid is related to the first one, and that is do not add any significant monthly debt months before your closing. You'd be amazed and shocked at how many times somebody gets rejected from a home that they want because gosh, well, they bought a new car, $40,000 car just four months ago or even seven months ago, thinking, "Okay, I'm going to get this out of the way and then I'll be ready to buy a home." Well, all you've done is just add quite a bit of debt to your debt to income ratios. And so, this spoils the deal quite a bit of times or you're forced to buy a lesser home because you can't afford it otherwise. So, do not add any more debt if you can avoid it. And also, just so you know, as an aside, if you have a lot of student debt and you're deferring your payments on your student debt, that still gets count into your debt to income. So, just because you're not paying on some of your big debt doesn't mean it's not going to get counted. So, just think of that as well. Okay. The third big mistake that I see that you really need to avoid is understanding that your down payment is not the end of the game in terms of cash to close. In other words, that's not the the extent of all your closing costs. There's plenty more going on there, and you have to be financially prepared for that. For example, you have a FHA loan, which is a 3.5% down type of loan, and you're buying a $300,000 home. The the check you're going to write at closing is not just 3.5% of 300,000, which would be $105,000. That's not the end of it. As I talked about in the five things you must know that companion video, you really need to know your closing costs and that's comprised of three buckets like I always talk about. So the down payment bucket is just bucket number one. You have bucket number two which is your your transaction cost and that's that on a $300,000 house at least in Texas that's going to be about almost $6,000. And your third and last bucket is your escros and your prepaid bucket. That's going to be three or $4,000. So, in the back of your mind when you're buying when you're thinking about buying a home just because you know what the down payment is, that's not the the extent of all your closing costs. There's plenty more going on there and you have to be financially prepared for that. And this is where kind of where I shine as a loan officer, by the way, in reducing all that cash to close. So, I can help you quite a bit here in terms of letting you know ways to reduce your cash to close. Okay. Number four, big mistake to avoid. This is a big big one because it costs lots of money if you get this wrong. the inspections. You want to get an inspection every time, of course, when you buy a home, especially an existing home, not a new build. You can even get inspections on those, but the the existing homes are are especially important. So, you want to comb over that inspection report very closely with your agent. I'm an agent as well. I can help you go over these things because you want to renegotiate the price or even seller concessions. If there's lots of items that need to be fixed, the lenders may compel the sellers to fix these things. And so you're in a great position as a buyer to renegotiate the price and and get better seller concessions. Beyond that, even though the general inspection item doesn't get real detailed into things like sewage and electrical and maybe even foundation. So in other words, it's very advisable, especially a very older home that may have was, for example, cast iron pipes that are 40, 50 years old. You want to spend that extra $300 or more to get a specialized inspector to go out and inspect that sewage line. for example, and because if there's blockage there or if there's cracks, god forbid, we're talking about $15, $20,000 worth of expense that you're going to find out about, you know, after the fact and you're going to be responsible for. That's not going to be a good surprise. So, pay that extra money to get, you know, peace of mind and all your electrical, your structural, and your plumbing are all good to go. That's vital. Okay. The fifth big mistake to avoid is is more of an oversight. And I think a lot of loan officers and agents are really responsible for this. But when you're trying to buy a home, understand, please, that you can get renovation work done for any aspect of your home. So, in other words, do not cancel a home in your own mind. So, well, we can't we're not going to choose this home because why? Because it's got laminate, old laminate on the countertops. It's got old shag rug upstairs. And maybe it's got ugly bathtubs that need to be repaired. All that can be fixed, folks. You should be concentrated on the neighborhood that you want to be in, the proximity to your work and maybe the schools or whatever you you know is important to you and just the general layout of the home. Everything else can be renovated and there's a renovation loans and you'll see some of these videos right here on renovation loans that can basically give you a new home. You know, again, subject to to afford it, but just know that you can replace any aspect of a home that you don't necessarily care for or think needs to be updated. So use the renovation loans as a way of expanding your opportunities in the marketplace and don't reject a home on that on on the basis of old features. Okay, bonus bonus mistake to avoid and I say this in all sincerity. Do not wait for the perfect interest rate environment. I'll repeat that because it's so important. Do not rate for the perfect interest rate environment. We're all waiting for rates to come down, but guess what? When rates come down, housing prices go up dramatically. They're on a seesaw here because it's more affordable. Rates come down. Why are you waiting for rates to come down? Because you want it to be more affordable. Well, guess what? Everybody else is too. And so when rates come down, more buyers come in and start buying the homes, driving the prices up. So most the savvy best investors understand this, savvy buyers, they buy the house they want. They buy the house that's in the neighborhood they want that fits their floor plan that has all the We talked about renovations, loans on the last mistake. just buy the house that you like in the neighborhood that you like and then if rates come back down, we just refinance. And by the way, you can get into a lower rate at the very beginning with what they call buy downs, a two-1 buy down, a 31 buy down. I can help you with that. I'm a loan officer. So, just use my expertise for all that. And but I hope all these were compelling reasons and mistakes to avoid. And u call me at any time at 2110-317-6514. I'm the mortgage patriot, Kevin Fagen on your side. Make it a great one. END OF TRANSCRIPT