As hot as the housing market might be in most of the country, this is not an indication of the kind of excellent deal you will get when you go out to buy a new house. As a first time home buyer, there are very many ‘land mines’ (pun intended) that you will have to avoid if you are to make it through to the other side unscathed.
Here are some of the biggest mistakes my daughter made buying her first home. Hopefully, you will learn from them and avoid the same adverse outcome.
They assume the money will come
Assuming that you will get financing just because you have some sort of income is a mistake. Sure, there is a good chance that you will get financing if you really want it. What does matter is the terms and conditions under which that financing comes.
If your credit score isn’t as favourable as you think it is, then the kind of interest rate you will get will be rather steep. Considering housing finance tends to last for decades at a time, that financial burden might prove to be too much in the long run.
Putting too much faith in online loan information
For the most part, the kind of loan information you find online will be accurate. Especially if you are dealing with a reputable financial institution where the information is updated regularly. That, however, does not mean that you should take that information at face value. It is part of a strategy to get you through the door. You need to call and talk to someone so that you can find out exactly what the entire deal entails before committing.
Not having an independent valuation of the property
Every home purchase requires valuation before the sale can be completed. For veteran home buyers, this is the litmus test that shows whether a piece of property is worth their time. They have independent valuers who will give them the naked truth as far as the property is concerned. This is something that first time homebuyers do not do to their detriment.
They rely too much on online price information
It is logical that one of the first things you will consider as a homebuyer is the sale price of the property. The problem with this kind of thinking is that it might not take into account everything else that goes into the entire deal from start to finish.
We are talking about things like closing fees, property taxes and so on. All of these things cost money; money that just adds up on top of that price you saw online.
Some of these mistakes might sound negligible at first. But if you look at them properly, you will see that they all cost you money eventually. To avoid over paying or spending too much on your first home, try to minimise the number of mistakes you make during the purchase process.Tags: first homebuyer mistakes, lessons for first homebuyers, mistakes first homebuyers should avoid