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First-Time Buyer Mistakes You Need To Avoid


So, you’ve spent enough time chewing the question over, and you’ve finally decided that you’re ready to buy your first home. First of all, congratulations! While looking for your first home is very exciting, there are also various pitfalls and risks that you’ll be up against. Obviously, you want to end up with a property that you’d love to live in at a price you can afford. This can be a lot harder to pin down than many people realise. There are a range of costly mistakes that many first-time buyers make when they’re looking at the market. Here are some of the biggest you need to make sure you’re avoiding…

Not Knowing What You Can Afford

If there’s one thing that property owners have learned from the past few decades, it’s that what the bank says you can afford and what you can actually afford are not necessarily the same thing. If you’re not already working with a monthly budget, you need to set some time aside to list all of your monthly expenses aside from rent. Groceries, credit card payments, student loan payments, health insurance, savings for retirement and so on should all be on the list. Make sure you’re not neglecting the larger expenses that you only pay once a year or so, such as annual insurance premiums and family vacations. Once you total all these expenses, and subtract them from your take-home pay, you’ll know exactly how much you can spend on your first home each month. When you’re narrowing down this figure, be sure to use an online mortgage calculator to check out your current interest rates.

Skipping Qualification

Unfortunately, what you think you can afford from your personal calculations and what your bank is willing to lend you for a given house for sale will not always match up. This is especially true if your income goes through fluctuations or you have bad credit. For this reason, it’s essential that you get pre-approved for a loan before you decide to make an offer on a home. Fail to do this, and you’ll be wasting the owner’s time, the agent’s time, and most of all your own, provided you sign a contract and discover that the lender won’t come up with the loan you need. While getting pre-approved is a smart step, it’s important to remember that your loan can still fall through at the last minute if something happens which alters your credit score. For example, if you get a car on finance after the fact. If you do anything that makes the deal fall through, you could end up wasting thousands which you put up when you originally agreed to the contract.

Forgetting About Additional Expenses


When you’re a homeowner, your monthly mortgage payments are just the tip of the iceberg. Unlike when you’re a tenant in a rented property, you’ll be responsible for paying property tax, making any repairs that the house may need, and insuring yourself against domestic disasters. If you’re looking into purchasing a condo, you’ll also have to cover monthly maintenance expenses, regardless of whether or not anything needs fixing. This is down to the way homeowner’s associations typically work. Do your research, and make sure you’re accounting for every little expense that you’ll have to cover once you buy your first home.

Being Too Fussy

Obviously, this property is where you’re going to be living for a number of years, so you should look for everything you’d want in your dream home. However, you shouldn’t let this wish list make you so inflexible that you wind up stuck in a rental property much longer than you intended. Most first-time homebuyers will have to compromise on something, as they typically have a strict cap on what they can comfortably afford. You may have to live with some outdated décor, live on a particularly busy street, budget for immediate repairs on your home, or go without the home office you wanted. There’s always the option to continue renting up to a point where you can afford all your criteria. This, of course, requires some careful consideration of how important it is for you to become a homeowner now rather than later.

Not considering Home Improvements

One of the big things that can come back to bite first-time home buyers is a lack of vision. Even if you can’t stand that hideous wallpaper in a certain room, it may be worth dealing with it in order to simply have a home that you can afford. If the home is perfect for your needs in terms of the location and size, but there are a lot of physical details that you’re not too crazy about, don’t let these turn you away. Doing home improvements yourself, even when you have to hire in a contractor, is often a lot cheaper than having to cover a higher home value when a previous owner has already done the work for you. This brings me onto my next point…

Falling in Love

Little upgrades and easy cosmetic fixes here and there are cheap tricks, and an easy way for playing on buyer’s emotions and getting a much higher offer out of them. Sellers may pay a thousand for minimal upgrades, or a few thousand for expert staging. If you’re on a tight budget, you should always try and restrict your search to homes that have a lot of untapped potential. When you have more flexibility to work on the house and make improvements, you’ll ensure a healthy bump in equity, and take you and your partner a little higher on the property ladder. Yes, you should consider how happy you’ll be in the property you’re viewing, but don’t let your emotions get in the way of a smart financial decision. So many first-time buyers think they’re making the right choice, and end up regretting it further down the line.

There you have some of the most common blunders that first-time home buyers make. Be sure to avoid this as much as possible!