Buying your first home can be an exciting endeavor and many first time home buyers jump right in, head first, without doing sufficient research. Buying a home is a serious decision and should be given the proper time. Take a sensible approach and read on for 7 mistakes you don’t want to make!
- Finding their dream home first:
Sure finding the perfect home seems like the point of the whole process but that is not the best place to start. Many first time buyers rush out and begin looking at gorgeous homes in their favourite area only to find, once they do the math, they are out of reach. Save yourself the disappointment and wasted time by getting pre-approved for a mortgage before going house hunting. This way you will know your budget and be able to shop within it.
- Waiting for better rates:
We all want the best rate we can get when making such a large purchase but waiting too long can make you miss good opportunities. If you are ready to buy, talk to a mortgage agent about adjustable terms and don’t delay needlessly.
- Thinking short term:
As easy as it is to get carried away by the job search, buying a house is a big commitment. Be sure to pay attention to developments planned for the area which might affect your resale value. As a first time home buyer you are likely not going to be able to afford your dream home right away so aim for a purchase that will allow you to resell in five years or so and make the move into your dream home.
- Making emotional decisions:
Don’t let a charming kitchen or nice architecture blind you to other problems like a moldy basement, this will lead to financial troubles in future. Run the numbers, make pros and cons lists for each property you are considering, and do your research. Never let a real estate agent see that you have fallen for a certain home!
- Overlooking the hidden costs:
There are many costs associated with homeownership beyond simply the mortgage and insurance payments: home maintenance, increased utility costs, taxes, repairs and renovations can all cost addition money within the first few months or years of your purchase.
- Skipping the inspection:
Inspections are a crucial part of the home buying process. Without an inspection home buyers run the risk of purchasing homes with serious hidden flaws such as bad wiring, moldy basements, or pests. Look for an independent inspector in your area once you are ready to make an offer on a property.
- Overextending their pocketbook:
Once you have purchased your first home, give your pocketbook some time to recover. The temptation is often to fill all those big rooms with shiny new toys and furniture but this can quickly add up and leave first time homeowners hurting. Focus on the most used rooms first and budget for the items that you need.