Common Mistakes First-Time Home Buyers Make

Homeownership is something that everyone dreams about especially with the rise in the cost of living at the present time owing to the Covid-19 economic depression.

For first-timers, buying a home can be stressful and also nerve-wracking because of all it entails. This makes it easy to fall into some of the traps that may be unknown due to misinformation or lack of adequate experience in the sector.

In 2020, first-time buyers made up thirty-one per cent of all home buyers. There is, therefore, an adequate need for preparation in regards to home buying because of the rising numbers of prospective buyers in the volatile housing
market.

1. Inadequate planning.
This is where someone buys a house that they can’t afford. One is therefore required to work within their own budget because a mortgage the payment you can’t afford is a particularly heavy burden as it might end up in you selling the
home or moving.

2. Wrong Lender
You will need a mortgage lender with whom you have a sort of mutual understanding.The relationship between one and their lender should be a healthy one because this will enable you to be exposed to several options and maximize them to your advantage.

Don’t rush to get real estate agents while ignoring your lender. Find a lender that invests time to explain all the nuisances and details of what it’s going to take and what you’re going to need at closing.

A good lender needs to have your best interest in mind by giving you multiple options to choose from for a down payment, a mortgage term, and other variables that go into buying a house because it’s your monetary asset.

Avoid lenders who rush you and offer no explanation behind their financial recommendations.

3.Buying a home when you already have debt
This will only plunge you into more debt which might then accumulate and spiral out of control. One ought to be financially unhinged before taking on a huge new mortgage.

You should properly plan before buying a home by first tending to all existing debts such as credit cards, car loans, and even student loan debt.

4. Little savings for a Down Payment
For a mortgage, one will need enough down payment of about 10 per cent and above. According to the National Association of Realtors, the average first-time homebuyer puts 5% down on a house, However, despite the standard down payment being 20 per cent, most people don’t put 20% down on a home.

It takes over seven years for an average homebuyer to save a 20% down payment on a typical-valued home, according to Zillow research.

One is therefore required to save at least 20% of the total house price to avoid paying private mortgage insurance.A larger down payment lets you get a smaller mortgage, giving you more equity in the home and potentially lower
monthly payments and you’ll pay a lot less interest over the life of a loan.

5.Wrong Mortgage
While Fixed-rate mortgages allow you to lock in your interest rates,adjustable-rate mortgages have an APR that will change with the markets over time so that when rates go up so does your payment.

The majority of homeowners choose a 30-year fixed-rate mortgage because it requires less cash upfront and offers lower payments month to month. But the trade-off is that you’ll pay more interest over the long term.

One should therefore Compare different offers to see how the term of your mortgage will affect your monthly payments and total interest and pick an option that he/she is comfortable with.

6.Looking at the quantity and not quality

Most first time home buyers easily get distracted by the spicy details and end up ignoring the actual quality of the home.

While the flashy details are sometimes easy to fall for, substance, the quality of the construction and the level of finish, should often be a key priority.

7.Not being open-minded

Some buyers are only looking for specific types of houses and are therefore for their own reasons unable to work with anything else that is contradictory to what they expected.

Limiting the search to a specific style of home will have you leaving out options that are far much more better than what you might consider being ideal. As much as everyone has their own preferences, one needs to be open-minded and explore all possible solutions before settling for one.

8.picking an unfavourable location
The other mistake that new home buyers make is just buying without considering things like convenience and location should they decide to sell the house in future. One is therefore urged to select a worthy location that will still be favourable even in the years to come.

9.Buying without a broker.
Buying a home directly without a broker will have you overlooking some loopholes that only a broker would be able to see and help you manoeuvre around without a glitch. One will need a good broker to represent them.

BY PHILLY OPERE