So you ready to buy your first home? Congratulations! This is one of the most important decisions of your life and one that needs to be executed with great care.
As you may have noticed, buying a home isn’t a simple process. It can easily the biggest financial transaction you’ll be involved in, and much bigger than buying a car or even starting a business.
Buying your first home, in particular, can be tricky. Once you’ve been through it the first time, it gets easier – you won’t feel so nervous about buying your second property in years to come.
There are, however, a few things most young people get wrong when buying a house for the first time. Let’s see what they are and what to do about it.
Mistake #1: Searching for a house first and a loan later.
Buying your first home? Then forget about the home searching for a while, focus on getting prequalified for a mortgage first. It’s only when you’re prequalified for a mortgage that you know you have enough cash on hand to pay for the home purchase.
The problem is most young people do the opposite – they just look for a house within a particular price range and then think about qualifying for a mortgage. That’s not the way to do it. The lender considers your credit worthiness and credit history, your current employment status and other factors and only then takes a decision on the loan.
When you get prequalified for the mortgage, buying a new home becomes a financial move, and allows you to think objectively. The last thing you want is to get too emotional about the whole thing. Just treat it as a business deal and keep a level head.
Mistake #2: Not considering other expenses apart from the mortgage payments.
One mistake first time home buyers make is to assume that just because they can afford the mortgage payments, that is all there is to it. No, the mortgage payments are only a part of your expenditure on the house.
You should consider other costs such as stamp duty, strata levies, property tax, home insurance payments, water and electric bills, internet bills and so on. Make a detailed assessment of your various expenses on the house vs. what you can afford before buying the house.
Mistake #3: Thinking you don’t need professional help.
If you’re a first time home buyer who is new to the game, you can’t do it all by yourself. You need help from an experienced real estate agent, a professional loan officer or mortgage broker you can trust and perhaps a lawyer who specializes in real estate deals.
It’s not really a good idea to venture out into the home buying process alone. You need support and guidance from proper professionals, people who know their stuff and can guide you through everything related to buying your first house, from applying for a mortgage to searching for a house in the right neighbourhood.
If you’re looking to buy or just wanting to understand the process and get organised, get in contact today for an initial chat.