It’s very easy to get excited about buying your first home and make costly mistakes. Yes, you might have done a lot of research on the property market and have a proper understanding. However, there’s much more to think about when buying a home. Here are the top 5 first home buyer mistakes to avoid.

1.       Not Getting Pre-approval

Many first time home buyers go to open houses and view potential properties on sale before meeting with a mortgage lender or broker. You need to be prepared when buying a home especially when there is tough competition and tight housing inventory.

Before you choose your dream home, you should start by securing a mortgage pre-approval. Sellers will get the message that you are serious and you have your finances ready. Also, you will have an idea of how much to spend and factor it into the price ranges when looking at properties.

 

2.       Not Shopping Around

If you focus on one mortgage lender or broker, you are likely going to lose a lot of money. By shopping around, you will have a better understanding of the options available to you. Even better, you can compare these financial options and get the best deal. Whether it’s bank or non-banks, start by looking at the lender fees, the rates and loan terms.

You can work with a mortgage express broker to assess your current situation. Also, they will shop around on your behalf and provide you with different options from varying lenders. A mortgage broker will also guide you on any obstacles to get a clear understanding of the process of buying a home.

While 89% of people are happy with their home, it’s likely because they took the time to look around and ensured that the home that they were purchasing was right for them. The last thing you want to do is rush into a home then realise you don’t like it further down the track.

Services like 4one4 Real Estate makes shopping for houses simple and easy due to the simplified layout. Being able to search for houses with this technique is essential if you are a first-time buyer.

 

3.       Not Paying Attention To Your Budget

Buying a house that you can’t afford is overextending yourself. It will lead to debt issues later in life. Even worse, you could be at risk of losing your home if you can’t pay the mortgage. Yes, it’s tempting to stretch your budget a little bit more.

However, you are putting yourself in a very dangerous position. For instance, the interest rates might increase or unexpected expenses might arise.

Well, you need to be realistic about the repayments. Start by calculating what you can afford to repay every 2 weeks or month. Don’t think about the maximum loan amount that you qualify for. Don’t forget to factor in other obligations or expenses that might not appear on your credit report.

That way, you will have a clear idea of what you can actually afford.

Additionally, not spending as much on important things due to budget issues is a common mistake that has repercussions further down the line.

The experts at Glen Gilbertson Floor Sanding explain that “we constantly have customers calling us for floorboard repairs due to the driveway having cracks or chips.

Even though their floorboard was installed recently, due to them not having the budget to analyse, measure and afford quality timber, over a short period of time the floorboard begins to have issued”. 

 

4.       Not Being Careful With Credit

Many financial lenders focus on credit history and reports. You need to pay a lot of attention on how to manage your debt. Before applying for a loan pre-approval, you need to check your credit report for any errors or inconsistencies. Also, you need to have a good credit score and pay off any debt you might have.

Don’t add any extra debt to your credit report. For instance, don’t take new credit cards or apply for new loans right before applying for the mortgage. Make sure you pay the bills on time every month.

 

5.       Not Calculating All The Costs

As a new homeowner, you need to have a clear understanding of the extra expenses that come with this responsibility. These include:

• Lender’s mortgage insurance
• Homeowner’s insurance and rates
• Repairs and maintenance of the property

You should start a savings account and set a small amount every month for repairs and maintenance issues. If you want to avoid paying the lenders mortgage insurance, you should save up a little more before buying a home. That way, you don’t have to take out a huge loan.

Ensuring that you have enough money to complete a project in your home is often brushed aside in the excitement of home purchasing.

Professionals plumber Brian Thurtell explains that “important parts of a renovation are often overlooked in the budget. While customers pay for aesthetically pleasing decorations in the renovation, they often fall into the trap of spending less on the plumbing materials of the renovation, leaving a nice looking bathroom that’s unfortunately prone to issues”.

Small but important things such as floor sanding are overlooked in the budget

Buying a home is a very serious investment. Any of these mistakes will lead to serious financial repercussions later.

Take time to speak to a good mortgage broker and a realtor if necessary to learn the ups and downs of buying a home. That way, you are prepared for all expenses and obligations that come with owning a home.

If you’re thinking about starting your house hunting journey, check out 4one4 Real Estate for a simple layout of the houses in your area.

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Written by: Jonathan Glover