Prone to mistakes, first-time homebuyers are oftentimes confused at the thought of purchasing their own properties. The process itself can be nerve-wrecking but with some little tips, the process can be navigated quite easily. The mistakes and tips can be easily organized into several categories: mortgage down payment mistakes and tips, mortgage application, house shopping mistakes and tips and rookie mistakes that can easily be avoided. But out of those, first-time buyers should follow the tips and tricks below.
Figure out how much can you afford to spend on a house
Never start the process without being certain that you know exactly how much you can afford to spend on a home. This will be a huge mistake since you’ll end up spending plenty of time looking at houses that are way over your budget. As first-time home buyers, you want to look at and buy houses that comfortably fit in your monthly budget. You don’t want monthly mortgage payments that keep you up at night. Generally, the best advice given would be to aim low when it comes to your monthly mortgage budget.
To avoid this huge mistake, make sure that you use a mortgage affordability calculator.
Your down payment is too small to count
You don’t have to pay half of the home’s value for your down payment to count. While some loan programs allow you to purchase a home with 0% down payment, it’s better to avoid those. Most homebuyers claim after purchasing their homes that they should have waited until they had a bigger down payment. The millennial homeowner has a single regret and this one seems to be.
To avoid this crucial mistake, try to figure out how much you have to save to enjoy a smaller mortgage fee. There is a downside to waiting to save up more money, however. Mortgage rates and housing prices may be increasing over the period which you wait to save up money. This may make you miss out on buying a home. All in all, make sure that you raise just enough money to ensure that you will make comfortable monthly mortgage payments.
Using all your savings
While making consistent down payment matters enormously, you don’t want to empty all your savings. Unexpected expenses with repairs and insurance will appear and they will most likely end up being quite expensive. Make sure that you keep some savings safe in a separate account. When things around the house need repairs and you have to make a huge payment, that money will come in handy. Otherwise, you will find yourself in a hole from where it is difficult to get out.
Look into first-time homebuyer programs
First-time homebuyers generally lack the financial means to make big down payments and close a deal. Don’t mistake this lack of finances as a need to delay your purchase. There are plenty of similar programs out there that may help you purchase your first property. These will most likely feature competitive down payment rates and mortgages so look into those.
To avoid this common mistake most millennials regret, make sure that you ask a mortgage lender if there are similar programs in your area. Lenders certainly know about these programs’ existence.
You collaborate with the wrong realtors
After you figure out the financial part, you should assure that you pay close attention to your realtors. Depending on which type of property you would like to purchase, you should look into different types of realtors. For instance, if you are interested in where to buy luxury off market homes in London, a luxury home realtor, one that most probably finds the properties off-market will be more suitable in your case. These realtors have a well-developed network of collaborators and contacts that will help you find your property safely and privately.
You may be surprised to find out, but high end London homes for sale are not there on display for everybody to see so, you will need the right agent with the right contacts. Plus, working with them will assure you that all your contact details and identity if preserved in full confidentiality.
Never shop for a house before shopping on a mortgage
We know, it’s more entertaining to start looking for homes right away. Shopping for mortgages is boring. But before jumping on realtors to help you find your dream home, you want to make sure that you discover the price range that you must find homes in. If you don’t shop for your mortgage previously, you may be looking in the wrong place for a home. You can either end up looking at houses that are well above your price range or below it.
To avoid this mistake, make sure that you discuss with a mortgage professional before even thinking to look up houses. This will save you time and money. Make sure that you find a real estate professional that will pre-qualify you before showing you any properties. It might seem like a small inconvenience in the beginning, but it’s all worth it.
You don’t fully understand the costs of ownership
You may not understand fully that buying a home is not the only expense that you have to make. Bills and expenses stack up monthly and keeping up with those is a highly important matter. It’s not only the mortgage payment that you have to consider when buying a home. There will be utility bills, insurance expenses and other repairs that may appear. Plus, there will be other expenses that aren’t necessarily linked to your property. Gas bills, insurance expenses with your vehicles, these will stack up and you have to carefully think about those as well.
Avoid this by working with a real estate agent that fully understands the neighbourhood where you plan to move into. They will be familiar with takes and lifestyle costs that you may not even be aware of.