Buying a new property is quite a challenge, especially if you’re a first-time buyer. From selecting the right estate agent to negotiating the best deal possible and securing a pre-approval for the mortgage, there are so many things involved in buying a new home. While the thought of becoming a homeowner is pretty exciting, the process of becoming a homeowner is tedious. Below are the seven most common mistakes that first-time homebuyers make and how to avoid making such mistakes when deciding to buy your first home.
1 Looking for A Property Before Applying for A Pre-Approval
First-time buyers tend to start looking at potential properties before even applying for a pre-approval on their mortgage. So, what happens is that most people fall in love with a property that is way over their budget, and then it becomes impossible to find a property within their budget that they like. By applying for a pre-approval, you will have a fair idea of how much the bank or lender is willing to give them as a mortgage. Based on this figure, you can decide on a budget and start looking at homes accordingly.
2 Speaking to Just One Lender
Most first time buyers talk to just one or two lenders before taking out a mortgage. But, there are hundreds, if not thousands, of lenders in the market. Also, there are so many different types of loans that a homeowner can use to their advantage. For example, first-time buyers can use the Help to Buy scheme that the UK government introduced to save some money on their deposit. As a first time buyer, you must explore all your options by speaking to various lenders and finding out about the different types of loans available to you before taking out a mortgage.
3 Not Hiring the Right Professionals for The Job
Let’s say you’re a first-time buyer looking to buy a place in Beckenham. Instead of trying to do it all on your own, get in touch with estate agents in Beckenham. While there is enough information online about the properties available in the market and how to apply for a mortgage, you should hire a professional to help you through the process of buying your new home. Not only will this make the process easier, but a professional will help you go about things the right way.
4 Still Making Large Credit Purchases
You’ve worked for quite a few years and managed to save enough money to want to upgrade your lifestyle, and that is quite understandable. But that does not mean that you need to buy everything at once. If you’re in the process of looking at homes, then you shouldn’t think of getting credit to buy a new car or opening a new bank account and getting a new credit card. Instead, you should be working on improving your credit score as it plays a major role in getting pre-approved for your mortgage. Instead of starting new lines of credit, first-time buyers need to work on paying off their debts to better their credit score.
5 Only Looking at Properties Based On Appearance
You walk into a property that has a beautifully staged living room with a modern kitchen, and you fall head over heels in love with it. But, how can a potential buyer make a purchase just based on appearance? You need to consider important factors such as the property’s location, the market value of the house, the basic structure of the place and so on. We spoke to some of the best estate agents in Streatham, and they can all agree that a potential buyer needs to focus on the property as a whole, not just the superficial parts of the property.
6 Forgetting The Hidden Costs Involved
Most first time buyers make the mistake of forgetting about the hidden costs. Buying a property does not mean just paying the down payment and paying off the mortgage. You also need to pay the real estate agent and the inspector you hired for the property evaluation. You need to buy home insurance, pay land taxes, pay property taxes and let’s not forget about the monthly utility bills and maintenance bills. When you start to save for your new place, you need to keep all these hidden costs in mind.
7 Making an Emotional Decision
Many homeowners walk into a property and fall in love with it. Then, things like budget and down payment go out the window. By falling in love with a place that you cannot afford, you will burn a deep hole in your pocket by making an emotional decision about a financial investment! Instead, you should look at quite a few properties that you ‘love’ and make a well thought out decision based on your finances and budget.