5 First Time Home Buyers Mistakes to Avoid!
First time homebuyers are prone to making a lot of mistakes during the process of buying their first property mostly due to the lack of experience and not seeking professional advice.
Here are 5 mistakes to avoid while securing one of the biggest investments you will ever make;
- Making a small down payment
Some mortgage providers allow you to buy a home with as little as 5% down payment. What this means is that the bulk of the mortgage payment is interest yielding thereby leading to huge monthly repayments. Consideration should be given to making larger down payments where possible such that the interest over the term of the mortgage is minimal. The key is making a down payment that helps you secure a monthly payment you are comfortable paying. It is also important that you check your credit report before applying for a mortgage. This would help you to ascertain your credit score and give you an indication of your chances of securing a mortgage. There are several credit agencies and a simple online search will provide information on your local providers.
- Not setting aside a funded emergency account
Whereby it is not a new property being acquired, it is always prudent to have an emergency fund account to cover any problem or unplanned expenses during or after taking possession of the property. Typical repairs may include things like redecoration, defects, change of doors/locks and so much more. Do not exhaust all your savings on buying the property with nothing left to undertake essential repairs.
- Not viewing enough properties before making a decision
Many first-time buyers tend to make their decision following viewing the first few properties. They fail to expand their search criteria to other areas, neighbourhoods or locations, which may tick most of the boxes of their search requirements. The rule of thumb is to undertake the viewing of at least 5 properties within your price range. By expanding the search criteria, it provides you the opportunity to compare prices and determine how much more value you can get by for instance extending the preferred location by say 1 mile.
- Do not remove conditions:
This often happens in markets where homes are selling fast and out of desperation the homebuyer instructs their solicitor to make a ‘clean offer’. Special conditions in property transaction are there to protect you the buyer in the event that the property does not satisfy the buyer’s expectations. Conditions may include subject to building survey, valuation or mortgage approval. Your solicitor will guide you as to the appropriate conditions to include in your offer.
- Think Practical; Not Emotional
You should never lead with your emotions while in the process of buying a house. Of course, you might have decided on the colours of your walls or the position you would like to place your TV. However, remember that this might be one of the biggest purchases of your life and there are a lot of other equally important factors that should be taken into consideration. These include your personal finances, location, condition of the property and so much more. Making a checklist of all the criteria you desire in a home would ensure the buying process is easier and more practical.
Pro tip:
Inspect the property you finally decide on more than once, because there might be things you missed the first time that you will notice on the second or third inspection.