Buying your first home is an exciting experience, but it comes with making many big decisions and can be full of complexities. In fact, many first home buyers are not prepared to make financial and practical decisions, as it is so easy to get swept up in the whirlwind of the idea of having their own home, which can easily lead to them not being certain about particular requirements.
Buying your first home is an important milestone, which is why you don’t want to make the wrong move and overlook something important. Understanding the process thoroughly and being in the loop of what is going on and what needs to be done can make this a positive experience for you to remember.
Here are some common mistakes that first home buyers make, and how to avoid them!
NOT ENOUGH RESEARCH/ PREPARATION
Researching and being knowledgeable about the home building process is vital in this project. Research about the house you’ve chosen, the neighbourhood, talk to the neighbours to get a feel of the type of people that live on the street. Find out which schools are nearby, shopping centres, what the public transport is like and even about the crime level of that neighbourhood. You’re going to be living in that house for a long time, so you need to make sure that you will be feeling safe. We also have a tendency of letting our emotions get in the way of making decisions. When you see a beautiful house that you like, you immediately start to imagine yourself in it – how you will arrange the furniture, about the interior, how to remodel the bathroom, etc. However, it is so important to not let your emotions get the best of you! Don’t get too far ahead and focus on researching about the essential parts of the property.
DRAINING ALL OF YOUR SAVINGS AND GOING BEYOND THE BUDGET
Spending all of your savings on the down payment and closing costs of the house is one of the biggest mistakes a first home buyer could make. Before starting the house hunting process, meet with a lender or a mortgage broker so they can explain to you exactly how much money you will be able to borrow. You are not only eligible for a home loan, but there are also many first – time home buyer programs that can assist you. There will be nothing worse than buying a home that will be way out of your budget. You will be offered a spending limit for a reason, so don’t settle for something that you won’t be able to pay repay. This can lead to first home buyers raiding their emergency savings, which can affect you in the future.
SPENDING MONEY BEFORE THE MORTGAGE CLOSES
As exciting as it may be for first home buyers to start buying furniture, home decor, appliances and so on for your new house on a credit card, it is a huge mistake to do this before your loan has been approved. The lender’s decision is based on your debt-to-income ratio and your credit score and keep track of it right up until the closing day. So if they see that your credit score has fallen or your debt-to-income ratio has gone up, they can delay or even cancel your mortgage closing. To avoid this, wait until after the closing to do any big spendings. This only includes getting a new credit card.
NOT GETTING A PROPERTY INSPECTION
It is helpful for first home buyers to hire a professional home inspector who will be able to find any problems with the house. It can be a worthwhile investment you make to avoid you with any problems in the future and save money on any major repairs. They can help with discovering any issues such as structural faults, plumbing, wiring, insulation and many other issues that may be unnoticeable to you. Buying a first home is going to be one of the biggest financial transactions you make, so you want to make sure if your dream home is actually the right place for you.
Are you a first home buyer thinking of building your own home? iBuildNew can help you choose the perfect home design and builder to carry out the project. Get in touch on 1800 184 284 or book a call to get started today!
If you’re having trouble financing, Download our FREE guide today to get a comprehensive overview of what you should expect and prepare for.