Top 4 traps to avoid for first home buyers

Posted on Wednesday, September 30, 2015 - 16:20

Usually, when people reach that new and exciting phase in their life of buying their first home, it means that you have attained a certain level of maturity and a higher level of awareness related to what is going on in their lives. Buying a new house is a big step forward for every individual’s personal progress. It’s an equally overwhelming and exciting experience. Therefore, this is why before proceeding to embark on this new adventure, they should take into consideration a couple of facts, in order to prevent being taken advantage of their lack of knowledge with regard to the matter. 

As expected, there are some traps people should avoid at all costs when it comes to buying a new house. Keep on reading the article to get acquainted with a number of precaution measures so that your moving experience won’t be shadowed by negative happenings. Borrowing more money than you actually need.

The lender will carefully investigate your financial situation and he/she will provide you with an estimation of your income. Your liabilities and assets will be taken into account in order to calculate the maximum amount of money you ought to borrow.

Nonetheless, first home buyers can be tricked into borrowing more money than they actually need. This means paying large sums on interest for a long period of time. This will imminently lead to coping with restrained budged and limited financial possibilities.

Not saving a sufficient deposit

A small deposit could place you in the category of high-risk borrowers and this will eventually determine the lenders to make extra efforts in attempt to create a safety net for your situation. Thus, you might end up paying a higher interest rate, additional charges and additional fees, as well as a lender’s mortgage insurance.

In this direction, you ought to make sure to save a larger amount of money before applying for a mortgage loan. This way, you will have a wide range of loans and lenders to choose from. Not to mention that you could completely reduce the mortgage insurance – this is a significant aspect.

Overspending with renovations

Inexperienced first home buyers might invest a large amount of money in renovating their dream home. Because of the whole excitement related to owning a first home, not undergoing proper research required in order to get acquainted with the range of prices related to home renovation costs leads to overspending. Thus, this reckless spending imminently leads to dealing with money problems in the future.

Not organising a building inspection

Bear in mind that before proceeding with purchasing the new house, it is mandatory to organize a pest and a building inspection. This way, you will be able to know its exact state and you won’t witness any negative surprises after moving in.

Organizing an inspection can help you negotiate the price of the house. Thus, if the authorized inspection reveals a couple of serious problems such as the existence of mould or termites, you may use this information in order to negotiate the asked price, and in this way obtain a more profitable offer.

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