Mistakes that first-time home buyers should avoid
Purchasing your first home can be as frightening and overwhelming as it is exciting. Being one of the biggest decisions you will make in your life, buying a home can be a whirlwind of an experience, causing many to make simple mistakes that unfortunately leave them with buyer’s remorse in the future.
In these instances, knowledge truly is power, so here are some of the most common mistakes you should avoid if you are buying a home for the first time:
Not applying for a mortgage
For many first-time buyers, viewing potential homes before consulting a mortgage lender seems like the most logical option.
But as today’s market is quite tight and competitive, it might be difficult for sellers to take your offer seriously if you don’t already have a mortgage preapproval or enough cash in hand.
To ensure you can get a mortgage and reduce your risks, it’s recommended to talk to several lenders, compare your options, and get a preapproval for the most suitable solution before shopping for a new home.
Miscalculating down payments
In many places around the globe, individuals believe that a down payment of 20 percent is the norm.
But that may not always be the case. In the US, for instance, the average down payment is around 12 percent, often going as low as 6 percent for first-time home buyers.
That is because there are a wide variety of mortgage options available to local buyers, including PMI and FHA loans that only require a down payment of approximately 3 percent.
Before putting down a large sum of money, it might be wise to check whether similar loans are available in your area as well.
Not consulting a lawyer
In countries like Australia, on the other hand, most first-time buyers fail to seek legal help when purchasing a home.
However, buying a home for the first time can be quite a complex and unpredictable process, from complicated transactions to heaps of confusing paperwork that needs to be completed.
That is why experienced Australian buyers tend to hire the help of a skilful property lawyer from Essendon when purchasing a home.
Such a professional can provide helpful practical advice and ensure the entire home buying process is carried out promptly and stress-free, which is why consulting a lawyer is always advised for first-time home buyers.
Overlooking hidden costs
While the costs of buying a home can often be high enough to shock many first-time buyers, what’s overlooked even more easily are the costs of owning a home.
From decorating, maintenance, and utilities to property taxes, homeowners insurance, and mortgage insurance, a number of hidden costs await first-time homeowners.
Not having a large enough budget to cover all of these expenses could be quite damaging to most individuals, which is why it’s recommended to count them into your monthly budget, shop around for the lowest rates, or even opt for a more affordable home.
Fixating on emotions
Purchasing a home is a great milestone in anyone’s life. It is a place where you will put down your roots and make wonderful memories, often making it quite easy to get too attached to certain homes.
However, buying a home is also among the largest expenses you will ever make, which is why you should never base decisions solely on emotions, as this will only force you to stretch yourself beyond your financial capabilities.
Instead, create a realistic budget and stick to it, making it a point to find the best possible compromise between emotions and finances.
Evidently, buying your first home is a complex, time-consuming, and emotional process that comes with many ups and downs.
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But as long as you avoid the most common home buying mistakes mentioned above, you can easily turn it into a streamlined and stress-free experience.