A year doesn't seem to go by in the property market when there are no first-time property buyers trying to invest in property and making many of the same errors that others have done before them. If you are looking to buy your first home, however, you don't need to make the same mistakes as your friends and relatives. In the following post, to help, we have highlighted some of the most common mistakes and how to avoid them.
Failing to Check Their Credit Report
Financial organizations use credit reports to make their decision about whether they should approve your loan application or not and the kind of interest rate they should offer you. If it is not the healthiest credit score or it contains various inaccuracies, companies may quote you higher interest rates than your situation deserves.
How do you avoid this mistake? It's simple - you should check your credit report and make any necessary amendments.
Failing to Calculate Your Budget Accurately
There is no point in looking for a home until you know the price range you can afford. Yet, so many people do it and end up getting their hopes up and wasting their time. If you want to avoid visiting homes that are lower or higher than your preferred price range, use an affordability calculator to price up the right mortgage for you and then start looking.
Failing to Calculate the Costs Involved in Owning Property
As common sense as it may seem, it's quite surprising just how many first-time buyers don't calculate all the costs involved in owning property. Many just spend a lot of time and effort considering the mortgage and nothing else. However, there are more ongoing costs involved in owning a home. For example, as well as the mortgage, you are going to have gas, oil, and electricity bills as well as cable/satellite television and broadband.
There are all these things that you will need to find a way to pay that aren't usually considered when the bank or financial institution is offering you your mortgage. To avoid this becoming an issue and preparing yourself for the different expenses that come with homeownership, it's a good idea to work with a realtor that knows the insurance and taxation levels for the area you are looking to buy property in. You also should request the utility bills for the house for the previous 12 months from the seller.
This will all help to give you a better idea of what you will be paying every month after you've moved in on top of your mortgage.
Failing to Get More Than One Quote
One huge mistake that many first-timers on the property make is that they choose the first mortgage they come across, rather than comparing what one lender offers over another, as do the discount points and closing costs. Therefore, when you take the first quote you are offered, there is a high chance you will be missing out on a better deal.
It is wiser to apply for mortgages from numerous lenders. Although it doesn't necessarily matter how many you compare, 5 is a good number to look at.
Failing to Properly Calculate the Cost of Potential Repairs and Renovations
Often, for many first-time buyers, it comes as a real surprise just how much the repairs and renovations on their new property cost. This happens generally because they often make one or both of two mistakes. Their view of how easy, cheap and quick renovations are has been influenced by reality TV shows that don't show it in the truest light, or they simply fail to get repair quotes from more than one business, and it is too low.
The best way to avoid this problem is to view all estimates from contractors for repair work and renovations as being too low. Some experts suggest doubling the quotes you are given to have a more realistic figure in mind.
With regards to the more expensive and repair work, like replacing a full roof, it is best to get quotes from a few businesses. If you choose a highly respected and reputable realtor, they should have a list of contacts and referrals they can give you for repair and renovation contractors. Don't just settle for those companies, though, as you should still search for independent referrals from family, friends, and colleagues from work.
There's no escaping the fact that buying a home for the first time is a nerve-wracking and overwhelming experience. It is all too easy to make mistakes. With the help of the advice above, though, you should be able to navigate the property market without making too many costly mistakes.