A first time home buyer will positively feel nervous as it is something that he/she has never done before. Also, purchasing a real estate property is a big commitment and investment which can blow up in our face if we are not careful.
Usually, first time home buyers make some pretty common mistakes which can cost you a lot. That is why, to be on the safe side, you should do thorough research. Make a list of things you need to check before finalizing your dream house. It’s very much similar to buying a new printer or buying a new desktop pc. Everything requires thorough research + shortlisting the options.
In this article, we have compiled a list of 6 common mistakes, which you should avoid. This is the data I went through while I was looking for flats in Jaipur.
1. Not making a Budget
It is worthwhile to look at houses if you haven’t figured out your budget. If you don’t know what you can or cannot afford, how will you finalize or negotiate on something? Aside from the mortgage, you have to pay the down payment, bills for water, electricity, labor, and so on.
It is crucial that you evaluate your asset and set aside a budget. Also, meet with some loan managers to know the best plan for you.
2. Not Hiring movers that are Professionals
Shifting to a new house is a tedious task. First, you have to sort through all your stuff from your old house, figure what to take and what to throw. After that packing, moving them and opening them is a lot of work. Even with the help of friends and family, it is almost impossible. That is why it is crucial to hire professional and best packers and movers.
3. Not getting more than one Rate Quote
When looking for mortgage and loan, getting a rate quote from only one lender is a big mistake. Every lender has different rates. That is why you should apply for multiple loans. It will give you plenty of options to choose the one that suits your financial aspects.
4. Making too small of a Down Payment
The down payment on the house varies in different regions and countries. Usually, it is 20%, but there are properties available in the market that you can buy for less or zero percent down payment.
But initially paying a small amount is a risk that you will regret later. If you pay a less down payment, your mortgage becomes higher. It will become difficult to afford things on a monthly basis.
5. Being picky
Your first house is special, and since you will live there, you want it as per your liking. It is great to have a Wishlist and look for things that meet your criteria. But if you are too picky, it will be difficult to find a decent and affordable house.
If you want certain changes, you can have them after you shift there. Or ask the owner to change the structure if the building is under construction. Also, figure out whether what you want and need is similar to each other or not.
6. Not having savings to cover the cost of repairing
If you are moving into an old house, it will certainly require repairs at some point in time. If you don’t have savings to take care of that repair, it can become a huge problem. Thus, when planning to buy a house, make sure you have enough savings to make a down payment, cover closing amount, and also have enough left to make some minor changes or repairs.
7. Looking for a house before loan/mortgage
If you start looking at houses without getting pre-approved for a loan, it will not end well. It is because you will have no idea what price range you can afford. You will keep looking at houses and you will set your heart on one. But when you go for mortgage shopping and the amount you get doesn’t cover that house, it will break your heart.
So, first, get your loan and then you can start hunting for your new home. It also places you in a position to negotiate better.
8. Not thinking about the cost of owning a home
When you own a home, you have other costs to think about. It includes gas, water, electricity bills and so on. You also have to pay some money as maintenance. You should consider all this and maybe not rush into buying anything expensive right after you move in.
I hope that this list gave you something to think about before you start looking for your humble abode. Hit me in the comments below, if I missed something.