The Assumptions That Are Keeping First-Time Buyers on the Sidelines Longer Than They Need to Be

First-time buyers are making three specific mistakes right now and each one is costing them in ways they may not fully see until it is too late to course correct. Mark Harris sees these patterns consistently and wants to be direct about what is actually happening versus what buyers think is happening.

Mistake One: Waiting for Rates to Drop

Rates might drop eventually. The problem is what happens the moment they do.

Every buyer who has been sitting on the sidelines waiting for rates to fall makes the same decision at the same moment. The market absorbs a wave of demand that was suppressed during the waiting period and home prices respond accordingly. You save one percentage point on your rate and pay eight percent more on the home. That is not a better deal. That is a worse one with a lower rate attached.

You can refinance a rate. You cannot refinance the purchase price. The buyer who moves now at today's price and refinances when rates drop will almost always be in a stronger position than the buyer who waited, paid more for the home, and refinanced into the same rate.

Mistake Two: Thinking You Need Twenty Percent Down

This misconception is keeping qualified buyers out of the market every single day.

FHA loans require 3.5 percent down. Some conventional loan programs require just 3 percent. Down payment assistance programs exist in every single state and most first-time buyers have never checked whether they qualify for any of them. The assumption that homeownership requires a large cash reserve built up over years of saving is simply not accurate for many buyers who are sitting out the market right now.

You could be significantly closer to buying than you think. The only way to know is to actually look at the numbers rather than assuming the barrier is larger than it is.

Mistake Three: Skipping Pre-Approval Because You Think You Are Not Ready

Pre-approval is free. It takes approximately fifteen minutes. And it replaces guessing on Zillow with a real number based on your actual financial picture.

The buyers who are ready to move quickly when the right home appears are the ones who already have a pre-approval in hand. The buyers who discover what they qualify for after they have found a home they want are always behind and sometimes lose the home entirely because they were not positioned to act.

Stop dreaming based on Zillow estimates. Start knowing based on your actual qualification.

DM Mark Harris the word READY and he will pull your numbers this week.

Sources

ConsumerFinancialProtectionBureau.gov
FannieMae.com
HUD.gov
MortgageNewsDaily.com
NAR.realtor