Buying a home comes with a lot of pressure. It is likely to be the biggest purchase of your life and you will be desperate to get it right. It is also surprisingly complicated, which means that no matter how hard you try, it’s easy to make mistakes. At the very least, there may be things that you wish you’d done differently if you’d had the benefit of hindsight.
One way of avoiding mistakes during the home-buying process is by learning from the many sales that have taken place in the past. Here are some of the most common reasons for deals to go awry and what you can do to ensure your purchase goes as smoothly as possible.
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Don’t wait to get your mortgage finalised
Purchasing a home can be a long, drawn-out process and this makes it difficult to know exactly when you should get a mortgage. Many buyers mistakenly wait until they have already begun their property search before arranging their mortgage, but this means you may have left it too late. In fact, you should begin applying for your mortgage as soon as you know that you will be buying a home.
First of all, talking with a mortgage adviser or broker will give you an idea of how much money you have to spend on a home. There are a lot factors that will affect your mortgage value, including your credit score, the amount that you’re able to put down as a deposit, and the total price of your new home. A mortgage broker should be able to bring all these factors together and tell you, in clear, black-and-white terms, how much you can afford.
The other main reason why you should sort out your mortgage as early as you can is to ensure that you don’t miss out on your first-choice property. There can be delays with the mortgage processing which mean that you won’t be able to submit an offer as quickly as you’d like. If this happens, another buyer may be waiting in the wings to secure your dream home. If you start the mortgage process early, delays are less likely to derail your purchase.
But don’t rush things
Although it is important to move quickly when buying a home, rushing the process is a mistake that you do not want to make. If you do, you can end up buying a property that, in hindsight, doesn’t suit your needs, or committing to a payment plan that isn’t right for your income. In order to prevent a hasty decision, make sure you conduct some thorough research. Look at the housing market in your chosen location and see how much properties of various types are selling for and how long they are generally on the market.
Similarly, once you think you’ve found your new home, that’s the not the time to rest on your laurels. In fact, that’s when the research really begins. Look over the property carefully and make visits at different times of the day. You may discover that noise pollution is a major issue due to rush hour traffic, for example, or that the seven o’clock train makes quite the racket. Also, ask your potential neighbours what the area is like in terms of entertainment and amenities. They are a more likely to give you an honest answer than your estate agent.
Furthermore, even if you don’t rush things, make sure you prepare yourself for what could be a lengthy process, and one that is largely out of your control. Some purchases can take months to complete, even after your final offer has been accepted. This is especially common when you’re buying a home as part of a property chain. In this situation, your home, and perhaps many others, are reliant on other purchases going through first. This can hold up a purchase for a long time so try not to get too stressed as you experience the long wait to get your hands on the keys.
Don’t overstretch your budget
As a first-time buyer it is difficult to know exactly how much money you have to spend on your home, which leads to one of the most common home-buying mistakes: overstretching your finances. Consider the worst-case scenario when finalising your budget – what if your employment circumstances change, for example?
Be realistic about the amount of money you will be able to repay each month on your mortgage and don’t be flippant when you’re looking at properties. It is true that buying a home is unlike any other purchase you are likely to make, in terms of price at least, but many of the same principles apply. Don’t adopt the mindset of looking to spend more than you need to. So, if you see one home that costs an extra thirty thousand dollars but comes with a conservatory – ask yourself, “Do you really need a conservatory?” Because a mortgage is repaid over many years it can be tempting to throw caution to the wind, but this is often a foolhardy approach to take.
Similarly, don’t put down the smallest possible deposit if you can afford to spend a little more. Larger deposits can result in more favourable interest rates, which mean that you will pay a significantly smaller amount for you home when added up over many years. It may make more financial sense to wait a little before buying your home, if it means you can save up a large deposit beforehand.
Skipping the inspection
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You’ve found your dream home, the price is affordable and you can’t wait to move in – but be careful before acting too hastily. If a deal looks too good to be true, it probably is.
To avoid buying a property that looks fantastic but is hiding potential pitfalls, then make sure you contact some trusted home inspectors to conduct a thorough examination of the property before you commit to the purchase. You may think that you have a pretty good eye for damage, but a professional inspection will cover everything, including the interior, exterior and all your utilities.
A professional inspection will also give you a solid bargaining tool when it comes to the moment of purchase. You should receive a detailed report of the inspection, including photographic evidence, which you can then present to the sellers that you are dealing with. Essentially, an inspection ensures that you have the knowledge you need to make an informed decision. You could use the report to back out of the sale altogether, or you could decide to go ahead with the purchase but with a reduced offer on the table.
Forgetting the extras
With house prices already staggeringly high, it is easy to forget about all of the other costs involved with a home purchase. That’s right, your budget has got to factor in more than just your mortgage.
Additional fees that accompany buying a house include valuation and legal fees and the cost of the surveyor. These costs will vary depending on the quality of the service that you receive and the value of your new home, but they are largely unavoidable.
In addition, there are other costs that, although not directly connected to the purchase of your home, should be considered. Maintenance costs, taxes and utility bills are sure to be different to what you are used to paying, particularly if you previously lived in rented accommodation. When you’re buying a home, remember that you’re going to have to live in it too!