When you’re buying a house, it can be an emotional, all-consuming activity. Everything’s a possibility and you want it all.
Just don’t forget to think about your money!
According to Fannie Mae research, today’s home buyers devote a lot of time to shopping for a house, and practically no time to choosing a mortgage which leads to higher interest rates, more closing costs, and general feelings of anxiety.
The study, titled “Lack of Mortgage Focus Complicates Home Purchase”, examines how first-time home buyers shop for homes and mortgages.
It tracked renters through three stages of home-buying:
- Searching for homes online, and in person
- Negotiations with real estate agents and sellers of homes
- Selection of a mortgage loan and financing
The renters told Fannie Mae that they found searching for homes to be “exciting” and “motivating”. It’s fun to shop for homes, they said, and to picture themselves living somewhere new.
We can all relate.
However, when the renters were asked to describe their mortgage experience, they used less-positive words, such as “frustrating”, “intimidating”, and “overwhelming”.
Most renters felt they lacked the proper time to research how mortgages work and to know all options and choices. Furthermore, more than half were rejected on their first attempt to get a mortgage, the result of overly-optimistic budgets and other factors.
Ultimately, though, those failed buyers regrouped and worked with their lenders to get educated and establish good standards. Many purchased homes in the months that followed.
The takeaway here is that the home buying journey has two components to it — the house, and the loan. Buyers who pay attention to both reduce stress, save money, and get more pleasure from buying a house than buyers who don’t.
Are you a first time home buyer?
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You’re not going to get that advertised mortgage rate because that advertised rates is generic – and you are not.