Common misconceptions among first-time homebuyers

June 13, 2013

Making the decision to buy your first home is an exciting and nerve-wracking proposition. Unfortunately, it is not uncommon for people to come into the process with misconceptions that could negatively affect their home buying experience.

According to a recent survey conducted by Zillow, a popular website that focuses on real estate, people in the market to purchase a home answered questions regarding mortgages incorrectly about 33 percent of the time.

The homebuyers were asked a variety of questions regarding financing and mortgage brokers. Among those questioned, over one-third believed they needed to have a down payment of 5 percent at a minimum to buy a home. In addition, almost one-quarter of the first-time homebuyers were under the impression that the bank where they currently had their business would always provide the best deal on a mortgage.

These common misunderstandings can be the difference between an individual getting the best rate on a mortgage and even between whether the person will decide to buy a home in the first place.

Take steps to protect yourself when buying a home

Before you begin the house-hunting process, it is a good idea to seek pre-approval for a mortgage from a lender. This will give you an idea of what types of homes you can focus on during your search, and will help you avoid those houses that might be outside of your budget.

It is important to note, however, that you are not required to use the lender who originally pre-approves you for your mortgage. If you find a better deal after obtaining your pre-approval, you may still use a different lender, which could save you a significant amount of money in the long run. This is a common misunderstanding, however, as over one-quarter of the respondents in the Zillow survey believed they had to obtain a loan from the same lender who provided their pre-approval.

All homebuyers should also ensure they obtain a home inspection from a qualified professional before closing on the house. A home inspector is a good compliment to hiring a real estate attorney, as the inspector will determine problems with the house itself and the attorney will identify potential issues with the legal rights to the land.

When people are interested in buying their first home, it is critical that they understand their rights. As the law can be complex, it is often a good first step to seek the advice of a skilled real estate attorney who will be able to advise the first-time homebuyer throughout the process.

Article provided by Timothy J. Morgan, Attorney at Law
Visit us at www.timothyjmorgan.com