As a first home buyer, it can be an exciting and emotional time searching from your dream home. Therefore, it’s important to have a clear head when making decisions along the way. One of the reasons why many first home buyers tend to make hasty decisions is normally down to a lack of experience and guidance. That’s why it’s paramount to not only know what you should do, but also what to avoid.
Here are three common mistakes that you should be wary of when purchasing your new home:
1. Making A Down Payment That’s Too Small
With buying a house up front not an option for everyone, the more pertinent question soon becomes how much your down payment should be. It’s natural to want to enter the market quickly, especially when rates and housing prices are low. However, this also needs to be matched with a stable income and a buffer to work with in case of rate fluctuations down the line. With the ‘Big Four’ in some cases willing to finance up to 95% of housing loans, it can be tempting to brunt the cost of LMI (Lender’s Mortgage Insurance) and purchase sooner than expected. In making the decision, keep in mind how much more interest you may end up paying. Moreover, it may be more difficult to build equity when you’re subject to rate rises in the future due to larger mortgage repayments.
2. Not Broadening Your Search Horizons
Even if your agent finds ideal property, it’s always advisable to check out other houses and weigh your options. Try as much as possible not to allow your emotions to get in the way of your choice, as you may miss a good opportunity to see a house that you would have loved if you had kept searching. A great way is by keeping a list of what you’d consider essential in your ideal home. Is it important to be close facilities such as parks and schools? Is the garden suitable and what about the neighbourhood noise levels? These are all considerations that need to be closely thought through and related back to your individual needs. In doing this, you’ll have a much clearer thought process when housing opportunities come your way.
3. Skipping the Inspection Process
Most first home buyers have more than a thousand reasons to skip the home inspection, but it is a necessary component of the buying process. It is wrong to assume that the building agent is right or there would be nothing wrong with the house because of the external look. House inspections give you an expert view on the property and prepare you for any eventuality. It is advisable to have a pesticide inspection to prevent any harmful pest invasion. It may cost money, but it is a lot cheaper than the cost you’ll incur if something goes wrong.