If you are thinking of buying your first house, you must be both thrilled and nervous at the thought. It can be exciting to think about finally moving out of your parents’ house and into a place that is all yours. It can feel liberating to put an end to monthly rental dues because you will now be paying for your property. At the same time, thinking about what kind of house you want, including the number of bedrooms and bathrooms you prefer, can also be overwhelming.
In this roller coaster of emotions, it can be easy to make a mistake in buying a house. We will ensure your home buying experience is a successful one by taking you through four of the most common mistakes first-time homebuyers make.
1. You Do Not Have Enough Money Yet
Buying a house is a significant life decision, and you need to be 100% sure you are financially ready before you even think about visiting homes for sale. Some people believe their monthly salary is enough to handle the total costs of a house only to end up in debt later on. To avoid this mistake, you can crunch the numbers yourself to see if the math works out to your advantage.
Most people look only at upfront costs when deciding if they can buy a house. Upfront costs include the down payment and reservation fees, closing costs to finalize the sale, and what remains usually make up an emergency fund. Once all that is settled, they think the monthly mortgage interest and principal costs are all they need to worry about. Unfortunately, that is not the case as you will also need to pay taxes, homeowners insurance, and homeowners association fees, on top of utility bills and you or your family’s other living expenses. Unless you can fit everything you own inside your car, you will also need to pay for moving costs.
2. You Want a House that Costs More Than You Can Afford
Let’s assume you do have enough money to buy a house and consistently pay the mortgage and other fees. You might think everything should come up roses at this point, but some buyers tend to bite off more than they can chew. When people go house-to-house shopping, they sometimes fall in love with a house that can be a little above their planned price range. Instead of accepting that it’s not meant to be, a bad home buyer would choose to take out a bigger mortgage to be able to purchase the expensive house. This can lead to several financial struggles along the way since it becomes an unplanned event without a budget to fall back on.
Sticking to a strict budget when buying a house is essential in ensuring that you will be able to cover your finances and keep your home.
3. Your Credit Does Not Look Good
You need to make sure your credit score looks good before thinking about purchasing a property. If your credit score is undesirable, it usually means you have financial setbacks on your record, such as unpaid bills, bankruptcy files, or significant debt. Like data management firms, mortgage lenders will do their due diligence in gathering information about you before they approve you for a loan. It is best to be honest when asked questions about your loan history or financial records so that they can also help you resolve those concerns faster.
Having little to no credit records can hurt your just as much as bad credit. Mortgage lenders prefer clients who can show proof that they regularly pay back what they owe, and even smaller credit records such as subscription services or rental histories are better than nothing.
4. Not Carefully Checking the House Before Buying It
If your finances are all ready to complete the purchase, you can proceed with house-to-house visits until you find a home you prefer. Sometimes, when we see a house we like, our imagination gets the better of us. We think more about what we want to do to the house in terms of redecoration and refurbishing while forgetting about what the house needs. It is not uncommon for owners to find out about the issues of a home only after finishing the sale.
To save yourself the hassle of discovering problems about your house too late, you can opt to get a professional home inspection. While you will have to pay extra for this service, the cost can save you more in the long run by avoiding possible disasters in the future. Tagging along as your inspector visits the house is also a good idea since it gives you another chance to look around and ask your inspector any questions relevant to their findings.
Buying a house can be nerve-wracking on your first attempt, but it does not have to be too stressful. Keeping these common errors in mind before deciding to purchase a home should significantly improve your chances of success.