Picture by David Mark
There are so many potholes to swerve when buying a first home, which is why rather than a generic ‘What to do when buying your first home’ post here’s the what not to do’s. From using the advice below, you can expect to retain some of your money, time and sanity during the first home buying process.
Listen To Advice
Just to be clear, this title refers to listening to advice from those who have no idea about what owning a home entails. So if your friend Jack, who still lives with his mom reckons he has a few opinions about what your priorities be when buying a home, just ask Jack to write it all down for you, and then put it in the bin. Get your real estate advice from people who work with houses, such as real estate inspection professionals, people who own their own property or people who work in the real estate sector.
Think Bigger Is Better
It’s almost certainly not when houses are concerned. You might be thinking ‘hey, the lender tells me I can afford to buy this 5 bedroom house, awesome!’, even though you’re single, and will be cohabitating with your pet goldfish Lucky, and will never ever use even half of those rooms. This isn’t a good idea in anyone’s eyes surely, unless you are unreasonably rich of course. Houses are expensive, but not just to buy, to keep, to fix, to maintain, it’s a never-ending cycle, so where possible, opt for less house, less mortgage, less work and you will get less stress.
Rely On The Lender
Banks to an extent take an interest in your finances in so far as they want to establish what you can afford, comfortably. So if you have a house in mind to apply for, they will also demonstrate the eventuality of interest rates rising, and assess if you have the freedom in your budget to accommodate to this change and maintain the mortgage payments. Which is reasonable. But, some lenders, may suggest that due to your earnings, and based on their findings while assessing your finances, that you could, in fact, afford a bigger home. This is a wow moment for most people, but it’s a trap! A large family home means a bigger mortgage, and a bigger mortgage means more interest to repay. Therefore if you’re already settled on a home that’s big enough, avoid deviating from this plan and buy the home you intended to.
Reserve On A Whim
This is obvious, yet, people still have their houses repossessed because they can’t keep up with the payments. And some people will happily commit to a home they can’t afford at the moment, but hope to rack up the deposit requested in a short amount of time. Buying a home is black and white where numbers are concerned. You work out the deposit (and other home buying costs) you need to buy the house, if you don’t have it, you can’t reserve it, it’s as simple as that!
To save failing at buying your first home, choose a home that’s practical and affordable, check the house is worth its price, only reserve a home when you have the savings to cover all of the costs and avoid the temptation to keep upping your budget. Stay strong and logical when buying your home, and you’ll thank yourself for it later on.
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