Top 7 Mistakes That Every First-Time Home Buyers Make
After bank approved your mortgage loan, you’ll step for next process — hunting a house. You may have searched for the expenses of buying a house before, deposit, stamp duty, legal fees, home inspection and etc and these expenses often can wipe out your savings before you get the keys of your new home.
As you are first-time home buyers, you may hard to control the particular expenses. But how do you know which expenses can be actually avoided. So, today, we teach you how to avoid these common mistakes and the solution for you to solve.
Though you surely want a home that has a lot to offer, it’s imperative to keep costs to a minimum. If you rush a purchase or make unwise decisions, you could end up spending more than you budgeted for.
1. Choosing a Risky Loan
For example, some buyers choose an adjustable rate mortgage to receive a lower interest rate early on, but they fail to realize that their rate and mortgage payment can increase in the future. Likewise, some borrowers pick a 15-year mortgage to pay off the debt faster, but then realize that they can’t swing the higher payments after a shift in their income.
This mistakes can affect your future, you can seek advice from bank consultant whether which type of home loan that suits your current financial status.
2. Overspending on a House
Lenders determine affordability based on the information listed on your credit report and your tax documentation. But sometimes, lenders approve applicants for a loan larger than they can afford.
Rather than being excited and accepting the higher mortgage loan, be smart and stick to your original price range. Splurging on a house provides immediate excitement and gratification – but your mood can quickly turn sour once the bills start rolling in. A big house typically equals expensive utilities, which can affect your disposable income and complicate your financial goals.
Don’t think that there is a luxury or big house has promotion so you decide to buy it. Yes, you may save money from purchasing a home, but how about its house utilities? It’s a long-term burden! Be sure you understand exactly your current financial status before deciding to purchase a house.
3. Skipping the Home Inspection
Home inspections are not required when buying a house, and some sellers can rush the process and discourage an inspection. But buying a house without an inspection is extraordinarily risky because serious problems can exist with the electrical wiring, the plumbing, the roof, or the foundation. An inspector can identify problems before the closing, and you can then ask the seller to fix these problems. If you buy a house and skip the home inspection, you’re financially responsible for any problems that arise after closing.
Don’t judge a home by its looking. there is many hidden problems that you might not know. Please spend some money on home inspection as it would be likely to save your money in the future.
4. Not Shopping Around
Save money on your first home purchase by simply talking with different lenders. Interest rates and closing costs vary among banks, and if you want the best rate and the cheapest costs, obtain multiple quotes. You don’t have to call 10 different banks, but it’s smart to request no-obligation quotes from at least three different banks or lenders. Compare each quote to determine the best option. Factors to consider include the mortgage rate, closing costs, down payment, private mortgage insurance, and a potential prepayment penalty.
In my opinion , good property never cheap and cheap property always out of your expectation. Whatever you’re looking for a house or search for bank loan, be sure that you have obtain the quotation from 2 or 3 resources. It is to compare the benefits.
Home Searching Mistakes
First-time home buying mistakes aren’t only money related. Become a savvy buyer and avoid mistakes while conducting your property search.
5. Not Visiting the Property Multiple Times
There’s nothing wrong with bidding on the first house that you see. However, plan to visit the property at least twice before submitting your offer. If a seller is motivated and ready to sell, he or she may rush the process or try to force you to make a hasty decision. But remember, once you sign the closing papers, there’s no turning back.
In the meantime, drive through and check out the neighborhood during the weekends and evenings. Are the neighbors rowdy? Checking out the neighborhood when the majority of the residents are home can help you determine whether the area is a good fit for you and your family.
Its about your future life, so make sure you have check the house area and the neighborhood.
6. Limiting Your Search
The majority of buyers have their hearts set on a particular neighborhood or city. But why limit your search area? Some buyers want to live close to their place of occupation, or keep their children in a specific school district. Regardless, it’s worth checking out other areas. It’s possible for your child to excel in another school district, and the extra time that it takes to commute to work may present the opportunity to decompress before arriving home.
Erm….I’m not agree with this point. Unless you are buying home for investment, otherwise, a house location is important for a buyer who buy it for own stay. As a Penangite (one of the state of Malaysia), I would only target at Georgetown, Julutong as this is the place that easy access to either Queensbay Mall or Gurney Plaza because Georgetown is in mid of these both places.
7. Not Working With a Realtor
You don’t need a Realtor to buy house – but before disregarding the importance of a buyer’s agent, understand that the seller’s agent has his or her client’s best interest in mind, not yours. They’ll offer you advice and answer your questions, but ultimately, this person is there to serve the seller. For this reason, find your own Realtor.
A buyer’s agent can guide you in the right direction, help negotiate your bid, counter an offer, and organize the closing process. And since the seller pays both agent’s commissions, it only makes sense to have an agent on your side.
So, be smart to choosing a realtor for yourself.
Although buying a house is really stressful and a lot of things that you have to worry about, but, it is a necessary procedure that will appear in your lifetime. So, do make sure you have educate yourself enough before hunting for a house. Even though there is still have unexpected problems pop out during the process, at least you have backup knowledge to avoid/ control these problems happened.