Are you planning to buy your first home? If so, probably you came across this guide because you want to know how to do it the right way, which is an excellent decision. Purchasing a home is sophisticated, although it is also an exciting decision because you finally will have a place you can confidently say you own.
Most likely, this is going to be your largest financial transaction if not one of the biggest and most home buyers make poor decisions because of lack of information. It is said that education is power, and that is true. Although the sellers overpower most of these buyers, and that is why they end up making the wrong choices, you don’t need to join them. To assist you this article compiles common mistakes you need to avoid when purchasing a property.
Image by mastersenaiper
- Failure to do Adequate Research
Know your family’s needs and finances. Wise home buyers analyze their assets, clear all the other debts they may be paying, and get approval for mortgage before they go out to shop for a home.
Understand the surrounding area. Remember that you are not only purchasing a home but also the location. Know the quality of learning institutions, upcoming zoning issues if any, transport, and crime level. Not every part of a suburb is a great place to live. If you choose to buy a property displayed on Movoto.com, be sure to read the description carefully.
- Selecting the Wrong Mortgage
Pre-qualification for a house loan is not enough to make you go hunting for a home. Get the loan pre-approved. Analyze your expenses and decide the amount you are willing to pay as monthly loan repayments. Calculating the amount you can borrow using bank online calculators is not a good indication of the amount you can borrow. What the banks will lend you is very different from what they indicate. Ensure you choose your mortgage package wisely. Instead of going to a bank, get an independent finance broker who knows several finance products and lenders.
- Letting the Market Influence You
The house you purchase should suit your needs. Therefore let no one influence you. The real estate industry experiences a lot of cycles. There is a time it favors the sellers, and a time it favors the buyers. Don’t wait for the ‘right time’ as this will be gambling with the future of your family. And that right time may never come.
Sometimes the posts you will see on social media make you procrastinate. But having a budget and organized finances and taking into consideration the future and current needs of your family, your decision should never be influenced by temporary market conditions.
- Exceeding your Budget
The reason for budgeting is so that you will be clear on how much you are spending. You know how it feels to get a home that is appealing but out of your budget. You start imagining yourself living in that house, and the more you think about it you convince yourself that you can as well go for it. After all, you want to enjoy life. That is a great mistake, and it can drain your finances.
It is the nature of human beings to desire more than we can pay for, and those property agents will make it seem the right thing to do. However, it is good to stick to your capacity. The reason your lender gave you a limit is that they have examined your incomes and know you can pay what they gave you. Do not exceed that limit.
When you purchase a house using a loan, you must be prepared to face increased interest rates. Purchasing a home at a price exceeding what you budgeted exposes you to such possible financial shocks.
- Letting Sellers Read your Emotions
Once you find your ideal home, stay calm and composed, no matter how excited you feel. It is normal to talk about how good every aspect of that house is, but these sellers are good at making you part with the last coin in your pocket once they read your emotions. Please do your best not to let them know.
There are lots of houses out there, and only one is the right choice at this instant. Leave all homes you can’t afford and don’t even negotiate about them.
- The ‘Fed Up’ Buying
You have been looking for a home and several months down the line you have not gotten your ideal home. You decide to buy whatever comes your way because you feel cheated by the agents thinking they lied to you and sold the house you wanted to a buyer with more money. Never purchase a home in desperation.
The decision to own your own house is exciting. However, that should not force you to make rash decisions. There are many mistakes homebuyers make; only a few have been mentioned. So watch out.