Image source: Getty Images
Everything doesn’t necessarily have to be perfect for buying a house to make sense.
Key points
- Many years ago, I purchased my first home.
- I made several mistakes, including not shopping around before getting my mortgage.
- I don’t regret the purchase because I made a profit on selling the house despite the errors.
When I purchased my first house many years ago, I wasn’t very experienced financially and I made some bad decisions during the buying process. Unfortunately, this ended up making my monthly mortgage payments cost more than they would have if I’d made better choices.
Despite the errors I made during the purchasing process, I do not regret buying that first home. Here’s why.
These are the big mistakes I made
There were two big mistakes I made when I bought my first house:
- I did not shop around for my mortgage loan: My real estate agent at the time recommended that I work with a specific mortgage lender that she had worked with in the past. I took her advice and contacted only that lender and no others. Unfortunately, this means I missed out on the opportunity to compare different interest rates. It’s very likely that I ended up paying more interest than necessary since I didn’t shop around. The lender also gave us a lot of hassle during the application process, which made the transaction more stressful than it needed to be.
- I made a small down payment: I put down only 10% on the house, which my realtor encouraged and my mortgage lender allowed. Because of my small down payment, I had to pay several hundred dollars per month for private mortgage insurance. This insurance didn’t protect me if I stopped being able to make payments, but it did protect my lender if a foreclosure occurred. If foreclosure happened, the lender would not face uncompensated losses due to the PMI I was paying for.
Together, both the PMI cost and the fact I likely got stuck with a higher interest rate than I should have, made my home purchase much more expensive each month and over time.
This is the very good reason why I don’t regret the purchase
Despite these mistakes, I do not regret buying my first house. That’s because I owned it for several …….