If you are first-time home buyer, buying a house can be overwhelming. As it turns out, this dream can quickly turn into a financial nightmare if you’re not careful. Avoid these common mistakes when buying your first home.
- 1. Not Knowing What You Can Afford
Not knowing what you can afford is one of the most common mistakes a first time home buyer makes. It is advisable to talk to a mortgage advisor before you start looking for a suitable home. The advisor will help to determine your budget
- 2. Not Looking Into All Mortgage Options
It does make sense to not only check your own bank but compare the different type of mortgages and lenders. Arrange a meeting with an independent mortgage advisor for they deal with a diversity of banks and lenders. They will compare the interest rates and mortgages so you can get mortgage that is the best suitable for you.
- 3. Not Understanding The Purchase Costs
As a rule of thumb, the buyer’s costs usually amounts to around 6% of the purchase price of the property. These buyer’s costs are a.o. the 2% transfer tax, the civil-law notaries costs, the estate agent costs and the mortgage costs. It’s common for first-time homebuyers to assume they need a mortgage. A lender is willing to supply a maximum mortgage amount of 100% of the purchase price. This means that you need to fund the 6% of the closing costs.
- 4. Forgetting to Consider All Expenses
Owning a home is much different than renting one. Make sure you leave enough wiggle room to save some money each month in case you need it. If something breaks, you have to pay to fix it. Many first-time buyers forget to consider the additional costs that can incur once you have bought a property, such as a building insurance, leasehold, maintenance, council tax and so on.
- 5. Not Choosing A Buying Estate Agent
First-time homebuyers sometimes try to cut costs and go directly to the listing agent. Internet has made it possible to do a lot of the research yourself, but there’s no substitute for an experienced professional. A crack negotiator who knows the market can save you time, money and heartache by helping you make the right offer.
- 6. Don’t Let Your Emotions Do All The Talking
These days, starter apartments go quickly, and it’s common for first-time buyers to experience rejection on the first offers they make. Buying a home can become a long and frustrating process. In that kind of environment, it’s easy to fall in love with a house that’s above your budget or get caught up in the heat of a bidding war and end up paying more than you wanted and more than it’s worth.
- 7. Fall In Love With Home Staging
Nowadays a lot of homes are staged to showcase a home for sale. The effect with attractive furniture and accessories are stunning displays of perfection. The problem is there’s a big gap between this idealized way of existing in a home and how we actually live in a home. The trick is to not fall in love with this decor and to imagine where you would put your own furniture.
- 8. Neglecting The Technical Inspection
A technical home inspection will help you avoid making a serious financial mistake. This report will state in what kind of shape the house is and what repairs you can expect in the near future. You don’t want to get stuck with a money pit or with the headache of a lot of unexpected repairs.
- 9. Picking a fixer-upper because the listing price is cheaper
That old charming house may have loads of potential, but what will it really cost to get your home where it needs to be? There are some potential hazards to consider before buying the house that will need some serious TLC. Think before you act.
- 10. Not Thinking About the Future
Think long term, for a house is more than a home, it is a long term investment. Of course you don’t have a crystal ball to tell you what will happen in the future but what are your plans for the coming 5 years? Are you perhaps considering having a family in the near future? Then you might be better checking out a family-friendly area instead of a buzzing area or buy a 2 bedroom apartment instead a 1 bedroom apartment.
The Bottom Line
Don’t think too lightly about buying a property. There is a lot to consider before entering the market. And if you do, make sure you have professionals at your side.