5 Mistakes New Home Owners Make

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The home purchasing journey is an exciting one – there is plenty to look forward to. In the spur of the moment, many new home buyers look at their potential home choices through rose-tinted glasses, ignoring red flags. This can result in problems arising soon after the purchase has been made, without any warning.

Here are a few things to consider before finalising your home purchase.

Mortgage Needs Approved First

Many first-time home buyers start looking for their dream homes before they get per-approval for a mortgage.

This puts these home buyers at a disadvantage when it turns out that the homes they have been eyeing were far outside their budget. It is important to know what price range you can afford as that will directly affect the houses you look at.

Once a person has a pre-approved mortgage, property owners will take them more seriously, knowing that they have the right credit scores and financial status with which to purchase a home.

No Inspection

More first-time home buyers are looking at second-hand home options because of their slightly lower prices. While this is not a bad decision, they often forget to hire a building inspector to look at the house.

As a result, they end up purchasing a home that looks good on the outside but is run down with may have issues such as faulty wiring, termite damage and a roof that leaks.

Search for a local building inspector, whether you are in Newcastle, Perth, Alice or Townville. A building inspection is a must and often sale will not be complete until you get an inspection done.

Small Down Payments

Some homes require you to pay a standard 20% down payment, while others let you get away with 3.5% or even no down payment at all.

While that sounds like a great offer, paying a small down payment will give you a bigger mortgage to pay off each month, which may make your home less affordable in the long run.

Saving up to pay that 20% down payment may sound tedious, but it would make your monthly loan repayments a lot easier, and you will, therefore, have more disposable income to hand in the months and years to come.

One Mortgage Lender

Mortgages are not easy to apply for a first-time home buyer, and so many do not bother checking with a second lender once they have obtained the rates from the first one. As a result, these home-buyers may find themselves with high mortgage interest rates and paying extra fees such as closing costs.

It would be a good practice to compare multiple mortgage lenders. Since any amount of mortgage applications made within a 45-day window count as one credit inquiry only, home-buyers have nothing to lose and a more affordable interest rate waiting for them.

There are websites that will do the comparing for you, saving you a lot of the investigative work. Once you put in all the relevant information the calculations are quickly done so you can compare what different mortgages are available to you.

Neglect Other Expenses

A first-time home buyer is often only used to their rental expenses. They forget about other financial commitments they have to make after they have purchased their home.

As a result, home-buyers think they can afford their home based only on their mortgage repayments so they end up not having enough money to pay for council rates, home insurances, emergency repairs and other miscellaneous costs.

Homeowners should research other financial commitments they will need to make and factor these costs into their budget.

Richa Sharma is a freelance author and writes for a variety of online publications. She actively writes blogs and articles and very fond of writing content on different trendy topicss related to Education, training,resources,health and technology.