The Dos and Don’ts of Homebuying

October 8, 2024

With the Federal Reserve beginning to cut interest rates, many prospective homebuyers feel encouraged to enter the market. According to recent data from Freddie Mac ¹ the 30-year fixed-rate mortgage average is around 6.09% as of September 2024, down from 7.19% a year ago. Regardless if you're a first-time buyer or a seasoned homeowner, covering your bases before diving into the homebuying process is essential. Here are some important dos and don'ts to guide you through one of the most significant financial decisions you'll make.

Do: Get Pre-Approved and Work with Trusted Professionals

Getting pre-approved for a mortgage and working with trusted professionals is one of the most important first steps in the homebuying process. This combination ensures you’re financially prepared and well-advised throughout the process. Pre-approval gives you a realistic understanding of how much you can afford, and working with experts like loan officers, real estate agents, and inspectors will help you navigate the process. At Affinity, our team of mortgage experts are here to guide you through every step, ensuring a smooth, informed experience.

Don’t: Overextend Your Budget

It’s easy to get carried away when you find your dream home, but overextending your budget can have future implications on your financial wellbeing. Spending more than you can comfortably afford can lead to financial stress, limiting your ability to save for future goals like retirement or unexpected expenses. It's important to note that just because you're approved for a specific loan doesn't mean you must spend it all. Be conservative when determining how much you want to borrow, and make sure your mortgage leaves room for other financial priorities, like building an emergency fund and paying off other debts.

Do: Consider All Costs Involved

Buying a home involves more than just the mortgage payment. Additional costs, including taxes, insurance, and maintenance, can quickly add up. First-time buyers may need to be made aware of these extra expenses. At the same time, seasoned homeowners should remember that costs can vary based on location and type of home. Be sure to research these expenses thoroughly to get an accurate picture of what you'll need to budget each month.

Don’t: Skip the Home Inspection

Never skip the home inspection, whether it's your first or fifth home. Even if the market is competitive, waiving the inspection might cause unexpected and costly repairs in the future. A professional inspection will uncover hidden issues like structural damage or faulty systems, giving you a clear picture of the home's condition.

Do: Keep an Open Mind and Communicate Non-Negotiables

Whether you are buying with a partner or on your own it's essential to keep an open mind about what you want in a home like a location and what you might be flexible on like a pool. Discuss your budget, long-term goals, and any concerns you may have with your buying partner and team of professionals, so everyone is on the same page. Aligning what's realistic will help avoid stress and miscommunication, leading to a smoother homebuying experience.

Don’t: Make Major Financial Changes During the Process

It’s crucial to maintain financial stability while going through the homebuying process. Avoid making large purchases, taking on new debt, or switching jobs before closing, as these changes can affect your mortgage approval. Lenders reassess your financial status right up until the closing date, so it’s important to keep your financial picture steady to avoid complications or delays.

Whether you’re a first-time buyer or looking to upgrade, buying a home is a complex process that requires careful planning and communication. By following these dos and don’ts, you can protect your financial wellbeing and make informed decisions. Our team at Affinity is here to support you at every step, with mortgage experts ready to help you get started on your homebuying journey. Contact us ² today to begin the process with confidence.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.