5 Worst First-Time Home Buyer Mistakes
Buying your own home is a big step in anyone’s life, but it can also be a step in the wrong direction if you’re not careful enough. Being well informed is the key in this delicate matter, as any mistakes could turn out to be major obstacles in your otherwise bright future. Financial and legal matters concerning home purchases can turn your dream of finally owning a house into a complicated nightmare, and you should be well prepared for what lies before you.
Don’t forget about added costs
You may think mortgage payment is the end of it – you have replaced your monthly rent with it and it is a done deal. Sadly, in their enthusiasm, many first-time home owners forget about additional costs which turn out to be too much for them, and they end up with huge debts. Property taxes, insurance, and maintenance costs somehow slip their mind, and the amount of money they need at the end of the month could actually be higher than they expected. When you add everything up, be honest and see if this new home is something you can actually afford.
Don’t expect your home value to grow over time
You know what they say: “If you buy a home now, at this price, you will be able to sell it for five times as much within ten years”. This is the kind of advice you should not take too seriously or else you can end up really disappointed. Hoping to turn a nice profit when you sell your home is natural to expect, especially if you have been investing money into it, but it is not a simple matter of maths.
Don’t believe the Internet
Online loan information and online home value can be the end of new homeowners’ research, and that is never a good thing. Actually talking to lenders will help you understand the lending process much better, and there will be no surprises in the end. Moreover, you should talk to more than one loan officer to compare their offers and conditions. In addition, researching home values online may lead you to getting the wrong impression about house prices. Talk to real estate agents in person and see what you can learn from their rich experience.
Think about moving again
Have you thought about what you will want ten years from now? If you don’t know if you are going to move in the next five to ten years, don’t buy your home just yet. If you happen to get a better job offer, what will you do with your new home you still haven’t paid off? What if you are not able to sell it or rent it soon enough? If your area does not have a strong rental market that would allow you to cover the mortgage in case you move, stick with renting, and listen to the advice from the Think Conveyancing team.
Don’t skip the inspection
You have been there, and you have seen the house with your own eyes – what can possibly go wrong, right? Looking good and being good through-and-through are two different things, and by skipping to do a thorough inspection you may end up with a lovely house that has bad foundations, for example. Have a professional do the inspection for you if you’re not sure what to pay attention to, chimneys, plumbing, electricity, foundations, water damage, etc.
Owning a house is more than finally having your dream home for yourself, as it also involves major financial concerns. House is a long-term financial investment, and as someone who has never owned a home before you should be particularly careful. Buying process is long and complex, and knowing your way through it may save you from wandering into serious debt.
Written By John Stone
Exclusively For Homes Re-Imagined, LLC