An increasing number of people are flocking to San Antonio due to its strong job market, affordability, and rapidly growing downtown. Typical home values in San Antonio average around $184,322, and the city was listed as one of the top five cities where homes could be a good investment in 2020, according to Curbed. Because the city is such an attractive place to buy a home, you could have some competition as you begin to look at properties in the area. In order to have the best chance of securing the keys to your dream home, avoid these six mistakes commonly made by first-time homebuyers in San Antonio.
1. Looking at Homes Before Meeting with a Lender
It can be tempting to start looking at homes right away, but you don’t want to find the perfect home only to realize you can’t afford it. Meeting with a lender and getting pre-approved for a mortgage loan allows you to get a good idea of how much you can afford and can increase your chances of having your offer accepted. Owners like to see that you have been pre-approved for a mortgage loan because it shows them that you’re a serious buyer who is prepared to purchase.
2. Foregoing a Real Estate Agent
An experienced buyer’s agent can be invaluable during the three main stages of the home-buying process: preparing, home searching, and closing the deal. Plus, it won’t cost you anything up front to hire one because they work on commission. Be sure to hire an agent who knows the area well so they can help you find a great home for your needs, and check their reviews and references to make sure they have sufficient experience.
3. Not Looking Into First-Time Homebuyer Programs
Some prospective homebuyers make the mistake of rushing into buying a home before checking whether they’re eligible for first-time homebuyer programs that can make homeownership more affordable. There are several programs to take advantage of in San Antonio, including the following:
- Homeownership Incentive Program (HIP 80): Down payment and closing costs assistance between $1,000-$15,000 in the form of a zero-interest, no payments second loan. The loan can be 100 percent forgiven over a five-year period.
- Homeownership Incentive Program (HIP 120): Down payment and closing cost assistance between $1,000-$15,000 in the form of a zero-interest, no payments second loan. The loan can be 75 percent forgiven over a 10-year period, and the other 25 is perpetual.
- Homes for Texas Heroes Program: Loan program for teachers, police officers, firefighters, EMS personnel, corrections officers, and veterans.
- Homes Sweet Texas Home Loan Program: Loan program for Texas homebuyers with low and moderate incomes.
4. Jeopardizing Your Pre-Approval Before Closing Day
Once you have been pre-approved for a mortgage loan, you should avoid doing anything to jeopardize that as you search for a home. A pre-approval is typically good for 60-90 days, and during that time you should avoid things like taking out new lines of credit, making large purchases, or quitting your job. Basically, don’t do anything that could lower your credit score or negatively impact your debt-to-income ratio.
5. Draining Your Savings
It might be tempting to drain your savings in order to put down 20 percent on a home, but it is often a better idea to put down less and pay for private mortgage insurance. That way, you can maintain a cushion for home maintenance and unexpected emergencies that are bound to arise after moving in. Plus, you will likely have the option to remove your private mortgage insurance payments once you’ve achieved 20 percent equity in the property.
6. Failing to Properly Vet the Home and Neighborhood
Another first-time homebuyer mistake is purchasing a home without having it properly inspected or without getting a feel for the area. Before placing an offer on a home, it is a good idea to check crime rates in the area, make sure the neighborhood is in a good school district, and see whether the home is in close proximity to places you tend to frequent. If possible, you should try to physically visit the neighborhood to get a feel for it and speak with current residents to see how they enjoy living in the area.
Once you decide to place an offer on a home, you should include an inspection contingency, so you can avoid moving in only to realize there are major structural problems that are going to cost a lot of money to fix. Hire a licensed home inspector and have them take a thorough look at the foundation, roof, HVAC, plumbing, and electrical systems before closing day.
Discover More Tips for the Home-Buying Process in Texas
The home-buying process can be a daunting experience, especially the first time around. Discover advice from loan officers on how to navigate the first-time home-buying process in our guide to Texas homeownership.