Skip to main content
Online Banking 800.362.3944

News

Mistakes First-Time Homeowners Make

February 16, 2018 | Blog, Home Loans, Products & Services

Back to News

Before you start home-shopping, talk to one of Heartland’s home loan experts. They can help you with the ins and outs of home-buying and even pre-qualify you so you know home much house you can afford.

Q. My husband and I recently decided to buy our first home. Some friends of ours had lots of trouble with the process and wound up buying one they can’t really afford. What can we do to buy our dream home without that grief?

A: Buying a house is one of the biggest decisions you will ever make, and there are common mistakes that many first-time homeowners regret making. Here’s how you can avoid them.

1.) Not Knowing Your Housing Budget

Avoid buying a home that is out of your financial comfort zone. After all, you don’t want to wind up being “house poor.”You likely already have a budget and some idea of your expenses for running your current household. Now is the time to review that budget. Some of your expenses are going to increase in a new home – like utilities and insurance.Some other budget items may change, too. Also, some expenses, like laundromat costs, may drop off the list completely. Add up all your expenses, but leave out rent or mortgage payments. When you subtract the total of this list from your take-home pay, you will have a good idea of how much you have left for mortgage payments. Find a mortgage calculator online and use it to calculate mortgage payments based on various available interest rates. Generally, housing costs should be 30% or less of your before-tax income.

2.) Looking Outside Your Housing Budget

Don’t even look at houses that fall beyond your budget; it’ll only set you up for disappointment. Even if you manage to buy the home, you’ll find yourself with too much house and too little money.After doing your research, you’ll know how much house you can afford. You can then pinpoint properties in that price range.Most home purchases require compromise. Maybe you’ll decide on a smaller house in a neighborhood with the best schools. If space is your highest priority, though, you might choose a larger house in a less-exclusive neighborhood. Every house has advantages and disadvantages, but keep your search within your financial comfort zone.

3.) Purchasing Based on Future Changes

If you are having trouble finding a house in your price range, consider ways to reduce your current expenses. This will mean having more money available to make a larger monthly mortgage payment. Many people mistakenly assume they will make these changes once they own a house. Ideally, these budget changes should be in place before you buy a house, even if it means delaying the purchase. Give yourself at least six months to see if you can stick to your new budget.

4.) Treating Your Home as an Investment

First-time buyers often anticipate selling their house for a large profit in 5 to 10 years. The last decade has brought major changes to every housing market. While a house in certain areas was almost guaranteed to appreciate in value, that is no longer a sure thing.

Learn more about how Heartland can help with your new home!

Are you ready to change?

Join now to start feeling the difference.

Join Now
Leave this Website?

You are leaving the Heartland Credit Union website. The website you are linking to is not operated by Heartland Credit Union. We are not responsible for any content or information posted to this external website. Heartland Credit Union is not responsible for, nor do we represent you or the external website if you enter into any agreements.

Privacy and security policies may differ between our website and this external site.

Proceed Cancel
Online Banking Secure Login

If you have not set up your username, please enter your account number.


Close