- Not doing proper research and not knowing what you can afford - Make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings, and so on. Use a mortgage calculator to research current interest rates. This will give you an estimate of what your total mortgage payments will be. It is important to have a budget, know what you can afford, and find out how much a bank will lend you before you start shopping for your first home.
- Not considering other expenses like paying property taxes, insuring your home against disasters, and making any repairs the house needs.
- Being too choosy about the property as being first time home buyers often have to compromise on things you want because your funds are limited.
- Do not let the physical imperfections turn you away. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size you should go for it as later on you can hire a contractor to renovate the property as per your taste.
- Be mindful during the process of home staging as some properties are prepped up just so to encourage the buyer to invest. If you are on a budget, look for homes whose full potential has yet to be realized.
- Better to go for a home that you can add value to, as the push in equity from your upgrades will help you to move up the property ladder. You might have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain.
- Before you close on the sale, you need to know what kind of shape the house is in and how much the repairs would cost. That is why you need to set up a thorough inspection of the property.
- Not using a real estate agent could be certainly a mistake as the agents are held to the ethical rule that they must act in both the seller and the buyer parties’ best interests. The agents are well versed with the rules and regulations hence enable a smooth transfer of the property. Of course, they do charge for their services, but it is totally worth it.
Buying a first home can seem stressful and overwhelming. If you are aware of the above listed issues ahead of time, you can protect yourself from costly mistakes.
Posted by Gurpreet Ghatehora on