Souqalmal.com: Buying your first home? Avoid these mistakes…
The experience of buying your first home elicits a broad number of emotions: Anxiety, excitement and a great sense of purpose. In any event, it is a staggering prospect for anybody who’s planning on going down the road to home-ownership.
The procedure is unquestionably more challenging for first-time homebuyers. Even well prepared, well-financed people could find it daunting and overwhelming. There are so many intricacies to the arrangement that one should be very mindful and cautious when cutting the deal.
The team at Souqalmal.com has rounded up some of the most common mistakes first-time homebuyers should try to avoid.
Underestimating the expenses involved
The upfront down payment and on-going loan installments aren’t the only things you have to worry about. Most homebuyers don’t spare enough for what comes after that: Life as homeowners. When shifting from rented accommodation to your own home there are accidental extra costs that are commonly ignored such as additional cash that will be required for extra closing costs (broker fees and mortgage processing fees) as well as fees related to property ownership and maintenance (relocation expenses, repairs, and renovations). Failure to factor in these expenses could be damaging financially.
Not availing pre-loan approval
A large number of first-time buyers commit the error of not getting pre-approved. First off, pre-approval from your bank goes far in financially anchoring the property you need and is the most ideal approach to discovering how much debt you can really manage. Furthermore, people selling homes are increasingly disposed to pick the offers of those that have just been affirmed for the explicit loan amount.
Not comparing different loan options
Most first-time home buyers might get a loan from the first lender or bank they get in touch with and later realize that they could have availed a better deal elsewhere. Always be sure to look around, compare rates, fees and loan terms. The more options you explore, the more your chances of forming a better basis for comparison and finding yourself a good deal. Also, factor in customer service and responsiveness when choosing a loan, as it makes the approval and repayment process a lot easier.
Not conducting a home inspection
We can never exaggerate the significance of a home review, specifically on a brand new property. This allows you to ensure you’re not making an egregious purchase. Besides the property’s value, aesthetics and documentation, you also need to weigh the benefits of the neighborhood you choose as well as factors such as security, resale potential, rental yield etc. Due diligence thus becomes essential if you don’t want to end up regretting your first purchase.
Buying sooner than you should
We’ve all been told that when you rent, you discard cash, yet that is not true in every case. When you’re choosing whether to rent or purchase a home, put forth a few inquiries to determining your real needs:
1) To what extent do you think you’ll need to remain in this area? On the off chance that you make the purchase and move homes, it can cost you a fortune.
2) Does your Debt-to-Income Ratio allow you to avail the loan amount you desire?
3) Have you set aside enough cash for the initial down payment? Will the down payment leave you cash-strapped when it comes to other major expenses?
4) Is it the right time to buy? Are property prices expected to soften in the near future? If this is true, you could be paying an excessive amount for your new home.
If you don’t want to get swept up in the whirlwind of bad decisions that could leave you with buyer’s remorse later, it is necessary to take carefully calculated moves before you buy your first home.