7 first-time homebuyer mistakes to avoid

It’s tough being a first-time buyer in today’s housing market.

Home prices are hitting record highs in many parts of the country, often selling for more than the asking price, and going from list to contract in a record 37 days, according to Redfin.

“We’ve never seen a faster or more competitive market,” says Redfin spokeswoman Rachel Musiker. “Basically this market isn’t for the faint of heart.”

Don’t make it even harder (or more expensive) for yourself by making these common mistakes:

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What the New Federal Reserve Interest Rates Mean for the Housing Market

Last December, the Federal Reserve raised interest rates for the first time in nearly a decade. While the Fed’s actions impact short-term rates, if you are in the market for a home, you may be wondering about the impact on mortgage rates, inventory and affordability.

You may be surprised (and pleased) to learn that the answer is: not much. The impact on home prices is expected to be very minimal, and interest rates are still much lower than average rates in past decades — which could make 2016 a good year for buying. In fact, a nominal rate increase translates to a very manageable cost. For example, an increase of 25 basis points on a 30-year fixed-rate mortgage loan of $250,000 raises the monthly mortgage payment by only $35.

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New Mortgage Disclosures

As of October 3, 2015, anyone purchasing property will get easier-to-understand disclosure papers for their mortgage.

Gone are the Good Faith Estimate, HUD-1 settlement statement, and 2 Truth in Lending Act disclosures. Those 4 documents are replaced by 2: the Loan Estimate and the Closing Disclosure.

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Saving On Your Homeowners Insurance

As with any insurance purchase, it is important to evaluate coverage and research your options to find the best coverage for your dollar. Here are some tips from the National Association of Insurance Commissioners (NAIC) to help you save money on your homeowners insurance.

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Face Your Mortgage Issues Directly and Realistically

Nobody likes to take a call from the collections department. It doesn’t matter if the call is about a credit card, a utility bill, a bounced check or anything else that may be delinquent. Avoiding the issue may seem like a good strategy to those who really hate conflict, but it is usually the worst thing you can do. This is especially true when it comes to a mortgage.

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Facing Foreclosure?

Scammers are targeting people having trouble paying their mortgages. Some claim to be able to “rescue” homeowners from foreclosures, while others promise to modify your loan – for a fee. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know how to avoid scams that could make your housing situation go from bad to worse.

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