When you do anything for the first time, it is natural to make mistakes. If you’re buying your first home however, you don’t want to make ones that are too costly.
First time buyers tend to come across the same issues. 40% of first time buyers even said buying their first home was one of the most stressful things they’ve ever done. Here is a list of just a few, so that hopefully you can avoid them!
Figure out how much you can afford
One of the most common mistakes first time buyers make is not figuring out their finances before looking at properties. Most buyers look at aspirational properties that are way out of their price range and then they are disappointed by the properties that they can actually afford.
The goal for any first time buyer is to get a loan with a monthly payment that won’t keep you up at night. It’s usually better to aim low. Use a mortgage calculator before you look, to know exactly what your price range is.
Some buyers will also underestimate how much of a down payment they should make. One of the most common regrets that millennial homeowners have is not waiting until they had more money for a deposit. The bigger the deposit they make, the less they will have to pay back each month. Make sure the deposit you make will bring down your monthly costs.
Not having enough money saved
Buying a pre-owned property almost always comes with the caveat that it needs work. A lot of first time buyers will empty their savings paying the deposit on their house and not have any cash left over for work that needs to be done.
Make sure you have enough behind you to be able to call out a tradesman, even after the down payment is made. If you find yourself needing roofing done in Sunderland, consider Findley Roofing and Building.
Applying for credit before the sale is final
Once you have applied for a mortgage, it takes a couple of weeks before the deal is final. This time period is crucial. So many first time buyers make the mistake of buying furniture on credit or taking out a new car on finance. You need to leave your credit alone as much as you can, because a lender’s mortgage decision will be made on your debt-to-income ratio.
This mindful attitude needs to carry on for a couple of weeks after the deal has closed. A lender will continue to monitor your credit, to make sure your credit score hasn’t fallen. If it has, you could face an increased interest rate or fees on the mortgage. In extreme instances, it could even result in a cancelled mortgage.
In summary, buying your first home is not a decision that can be rushed into. Take some time to really consider your financial situation. That way, there’s no chance you’ll make any of these common first time buyer mistakes.