Buying your first home is exciting, but many first time home buyers are susceptible to some unexpected pitfalls. It’s important to get up to speed on some of the unexpected mistakes many first time homebuyers make when they begin searching for their first home. We here at FifthAndHazel have compiled a list of six common mistakes that first-time homebuyers often make, along with tips on how to avoid them.
- VA Loans are offered by private lenders, but are backed by the Department of Veterans Affairs. VA loans generally offer better terms than traditional loans, and the majority of active and former service members, as well as members of the National Guard, qualify for them.
- FHA Loans are loans that are backed by the Federal Government, and can be very attractive to first-time home buyers due to the relatively low down payment they require. However, in contrast with traditional mortgages where borrowers are required to pay mortgage insurance until they have paid off 20% of their home, those who take FHA loans will be required to pay FHA mortgage insurance for the lifetime of the loan.
- USDA Loans are intended for prospective homeowners who are looking to purchase a home in USDA-eligible areas. This type of loan is suitable for people with lower incomes who are interested in purchasing a home in a rural area.