Buying a house is a serious purchase, yet many people go about it the wrong way. Keep reading to learn five of the biggest mistakes home buyers can make, and how you can avoid them.
Buying a house when you’re planning on relocating
This may seem like common sense, but you should definitely avoid buying a house if you’re thinking of moving again in the next few years. Many people purchase property and assume it will be easy to rent out or sell when they decide to move cities, but that’s not always the case.
Although renting might be frustrating for the time being, it’ll be much easier in the long run if you’re not sure you want to stay in the area. Only buy a house if you’re certain you want to live there for a long time.
Not being realistic about your budget
Particularly for first home buyers, you need to remain realistic about what you can afford. Don’t get carried away and overspend just because you see your dream home. Avoid going up to your highest limit in the event that your income is suddenly reduced.
Interest rates are rising, and it’s crucial that all potential home buyers pay attention to the mortgage market. Habito is a fast, easy and free to use mortgage broker that has a great mortgage comparison calculator.
Forgetting about added costs
Have you considered real estate fees, property tax, insurance, and the cost of utilities? What about any maintenance, repairs or renovations that will need to be done to your new home?
Remember that the final price of the house or your monthly repayment isn’t the final cost. Add up every additional cost you can think of to truly determine if your ideal property is still within your budget.
Not putting down a nominal down payment
While down payments in some states can be as a low as 3%, this is considered very risky. Moving in, you’ll want to have as much equity as you can.
If you’re not able to put down a nominal payment of around 20%, you may want to reconsider your need to buy a home just yet. Spending an extra year or two saving up means you could avoid paying private mortgage insurance.
Buying everything brand-new
After buying a new house, especially if it’s your first time, it’s tempting to buy brand-new everything else too! Maybe you suddenly find yourself with a large dining room when the apartment you were renting before didn’t have one at all. Live in your home for a while to determine what appliances you really need and can actually afford to purchase.
Don’t fall into the trap of feeling like you have to upgrade everything. If you want to treat yourself to some new decor or furniture pieces, scour markets and thrift stores to find some affordable deals.