It's easy to get excited about buying a new house, and you might want to rush things so you can get in your new home as soon as possible. However, it's often better to take your time and prepare carefully for the important step of homeownership, especially when you're a first-time buyer. Here's why buying your new house might take longer than you expect.
1. You Need a Large Down Payment
You usually need to make a down payment on a house. The amount varies by lender, the type of loan you get, and your creditworthiness. The amount of the down payment you have affects the value of the home you can buy. You might need several months to a couple of years to have enough money for the down payment and extra costs associated with moving into a new house and getting it set up.
2. Your Credit Needs Work
You can often get a mortgage loan even if your credit isn't good, but you'll pay a higher interest rate. The result might be payments you struggle to pay or you might have to buy a less expensive house you don't like so you can qualify. Problems on your credit report can often be repaired. Negative remarks that can't be removed lose their importance as they age.
You may want to talk to a credit counselor for advice on how to improve your credit to make you more attractive to mortgage lenders. You might need to freeze new credit applications, pay down credit card debt, and not miss a payment for several months as your credit score climbs month after month.
3. You Can't Find a House You Like
If you want a house in a specific neighborhood, you may have to wait a lot longer for one to become available than if you are open to living anywhere. The real estate market changes frequently, and you may find there aren't many houses on the market when you get ready to buy.
If that's the case, you'll need to decide if you want to wait it out until you find a house you love or if you're willing to buy a house you're not in love with just to have a place to live in that you own.
4. The Sale Falls Through
There are few things more disappointing when you try to buy a house than to have the deal fall apart before you close. This might happen due to things found in the home inspection or title search that are no fault of your own. On the other hand, your deal may fall through because of changes to your finances between the time you were preapproved and when you applied for the mortgage.
You can waste valuable time and be heartbroken when you have to start your home search all over. Be aware of the things that might affect your ability to buy a house so you're better prepared. You can also take steps to keep your credit score as high as possible until you've bought your home so you don't have any problems getting a mortgage.