Being a first-time house buyer can be quite a daunting situation to be in. Given the financial implications of making the wrong decisions and the pressures involved in purchasing within the housing market it is entirely understandable.
There are many out there but equally there a lots of common mistakes that many people make. To ensure that you avoid making the same errors which have plagued others take a moment to consider some of these regular pitfalls.
Can You Really Afford It?
Being able to afford a mortgage is one thing but being able to actually afford a mortgage and still own and run a home can push buyers much further than they would have expected. Additional fees such as maintenance bills, insurance fees, taxes and general day-to-day life factors can quickly eat into the initial budget people make and if this steps out of line it can quickly come back to haunt a first time buyer. Outgoings such as bills and taxes are more than likely to increase each year faster than people predict and if they do spike quickly this can become a serious issue.
Buying a new house, particularly for the first time buyer is, understandably an exciting time. However this can quickly catch up on people if they get caught up in the moment and overspend on new house items and cosmetic touches. Alternatively a property may come with lots of small upgrades attached which can add up far quicker than the buyer realises. Before they know it, items which really weren’t necessary to purchase there and then might push their budget beyond the limit. Remember that a house can be upgraded over a period of time and it doesn’t all need to be purchased initially.
Not Shopping Around For a Mortgage Broker
The principle of using a to secure a better deal on your loan is not doubted by many first time buyers. However, all too often people do not shop around enough before settling for one. Some companies operate great partnerships with lenders, for example who have set up long standing agreements with loan providers and may be able to provide better deals than others. Shop around and read all of the services on offer to make sure that you are actually getting the best deals available.
Not Getting Pre-Approval
Just getting the qualification for a loan is not the end of the story when it comes to securing a loan. You should find out how much the lender is willing to provide so that you can then find out how much you have to work with. Having properly understood the value available to lend you can focus on the next step of deciding on a house.
Not Explaining Your Full Circumstances
Not all loans are equal and you need a broker to understand exactly what it is you require. Perhaps a deposit will save you money in the long run but it will put you in a worse off position financially at first which does not suit your present budget. Make sure your broker fully understands your situation so they can help you as best as possible.