Buying a home is an expensive process, but many homebuyers can make it all the more expensive by making silly mistakes during the purchase. Here are just some of the costliest blunders to avoid when buying a home.
Choosing the wrong mortgage
Many buyers don’t do enough research before choosing a mortgage lender. This is particularly the case with first-time buyers – many of whom are happy to settle for the first lender that accepts them.While it’s important to find a lender that will accept you, it’s also important that you understand what you’re signing up for. For instance, how much will you be paying in interest? Fixed rate mortgages may come with a fixed monthly rate that you can budget for easily, while variable rate mortgages may have constantly changing interest rates – which could one day rise dramatically.Early repayment charges are also something best avoided. This means that you could get charged extra for trying to pay your mortgage off early!It’s often worth reading reviews to see what fellow customers think of a lender. This will usually give you an idea of which lenders are reliable and which charge sneaky hidden fees.
Not comparing other property prices in the area
If you find a property that you like, it could be worth checking prices of other properties in the area. This could ensure that the property isn’t being overpriced compared to other neighbouring properties.You can compare prices by looking at other nearby properties on listing sites and even by asking neighbours. There are even online tools that can tell you the average price of property in an area.
Skipping a home inspection
A real estate inspection isn’t mandatory, but it’s highly recommended whenever you buy a property. Such inspections can give you a good idea of a property’s condition – and whether there are any expensive repairs around the corner.
A thorough home inspection could cost up to a grand (or more depending on the size of the property). However, skipping a home inspection could potentially cost you thousands more in the long run if you end up accidentally buying a nightmare property that needs lots of maintenance.
Failing to negotiate the price
With most properties, there’s some room to negotiate the price. In fact, you’ll find that most sellers are willing to drop the price by 5% if there’s a serious offer to buy on the table.
Obviously, this may depend on how much interest a property has had from other buyers – if others have already made offers, you may want to stick to the asking price. Always enquire as to how much interest a property has had so that you know how much to negotiate.
Not budgeting for extra buying costs
There are many other costs that come with buying a home including conveyancing fees, appraisal fees and moving costs. Make sure that you have enough money set aside for these costs so that you’re not having to borrow money.