How can you avoid common misconceptions when buying your first home?

In my experience as a Mortgage Advisor & former Financial Advisor, many unfortunately make the mistake of assuming that they cannot afford a home purchase, before reviewing the numbers. Others may have the opposite assumption, that they can afford a property, when in reality they should wait. A good mortgage calculator is key, but more importantly, a reputable, licensed professional, can help guide through your personal circumstances. Knowing the numbers is only part of the equation. It's important to also learn how a new purchase could impact you for long-term financial planning. This is a FREE service most Advisors offer, so be sure to research your professional of choice and/or ask for referrals, to ensure you get the guidance you need!

In my 33 years of selling real estate, I believe the biggest misconception for first-time homebuyers is thinking it's beyond their means, and for some, it may be, right now. But they shouldn't put the cart before the horse. Their first stop should be to speak with a reputable, licensed mortgage lender. Have a discussion, let them look at the income and debts. Many people are surprised to find they do qualify. Even if they aren't ready to purchase a home at this moment, they know how much they currently qualify for. And if they don't qualify right now, a good lender can tell them what it's going to take. Maybe it's as simple as clearing a few debts, or it may be a few things. But at least now they have a roadmap to homeownership.

It's also important to keep in mind that although interest rates may be higher than desired at present, leading economists expectations are that they will drop at least 1% - 1.5%+ over the coming 12-24 months. As they decline, millions of Americans are expected to come off the sidelines and enter the home buying market. When this happens, it will create a new surge of housing demand, which will drive home prices up even further. There is a saying floating around the industry that is worth consideration: "Date the Rate. Marry the House." You can always refinance and swap out the debt tied to the property. However, relocating at a later time may prove to be more challenging than it is at present.

When considering which Mortgage Professional to partner with, often what is stated online is to "shop" your rate, fees, terms, etc. However, it's important to first understand how to compare options and to know what you are really shopping for. A low rate, with the wrong strategy, could cost you thousands more, than a slightly higher rate with the right one. The best place to start "shopping" is not to identify who quotes the cheapest price. Rather, shop the PROFESSIONAL, before even starting the process. Ask for referrals from professionals, friends or family, read reviews, look them up online/social media, ask your Realtor, etc. A good professional will more than make up for any perceived "cost," through their solid advice & planning.

In the local market, home inspections usually range from just $400-$500. Considering a new home will cost hundreds of thousands of dollars, this is a very small amount in comparison. A good Inspector will spend several hours at the property, checking outlets, opening doors, examining the furnace/AC unit, look at the crawl space & attic, and more. Having a detailed report of the entire home's condition, will help you to be prepared for what you are getting into as a new home buyer. It can also help a family budget for future repairs, by knowing what to plan for right away. This is an invaluable service that most homeowners would not want to skip!

I once worked with a couple who decided to "shop" for the lowest rate, by going to a large national Bank, instead of following the advice I provided. That lender approved them for a lower rate/cost than they wanted, due to their conservative policy. They bought a home through that they believed fit their needs. 2 months in, they realized the property was not large enough for their growing family and the location wasn't right either. They sold the home less than 6 months later, and I was able to help them find the right one, at the original price they needed. Between the higher rate price from the original bank, closing costs (twice) and Realtor commissions, their decision cost them $30K+ that they didn't need to spend. Planning = Success!

Work with an experienced agent to find homes before they hit the market. If you are working with an agent who knows the market he or she will or should have a database of other agents and contacts that may know of something coming to the market that is not active as of yet