Advise for First Time Home Buyers

What! You spent more than you thought?

Advice for First Time Buyers is Keep careful track of those expenses!

BBVA Compass, a financial institution, recently released a new survey on first-time home buyers indicating that, prior to purchase, a vast majority of first-time home buyers (88%) believe they have accounted for all expenses related to owning a home.

Seemingly contradicting that notion, amongst those who had purchased a home in the past 12 months, more than 50% of indicate the expenses were more than they had calculated, causing a change in lifestyle.

These results came from the BBVA Compass First-Time Home Buyers Online Survey which polled American consumers about the thoughts, emotions and hurdles related to owning and enjoying a first home.  Regarding potential first-time home buyers, key findings included:

  • Nearly one third have anxiety over the affordability of owning a home.
  • Seven in ten indicate that the first-time home buyer’s tax credit has not truly factored into the timing of when they decide to purchase a home.
  • Having additional time before the first payment due date would be helpful—92% of respondents indicated.
  • Understanding the process is the item that will be most important to them when looking for financing on their new home purchase, but likely also the most confused aspect.
  • Ultimately, the first-time home buyer is seeking someone who will provide clarity through each step of the process, from loan options to factors that might affect the rate obtained.

Regarding first-time home buyers who have purchased a home in the previous 12 moths, key findings included:

  • 51% indicated that the monthly expense of owning a home was more than they calculated.
  • Although 7 in 10 respondents said that the unexpected expenditures leveled out over time, another 87% said they changed their lifestyle as a result of the additional expenses.
  • Nearly one third indicated that they paid for these unexpected expenditures with a mixture of cash and credit, perhaps indicating a lack of liquid funds.

“Obtaining a mortgage can be very confusing and expensive process, particularly for the first-time home buyer,” said Jon Mulkin, executive vise president “The more clarity, transparency and help in making the financial transition from renter to buyer that banks can provide, the better positioned the consumer will be going into long-term homeownership.” For more information, visit www.bbvacompass.com.

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