Every year, thousands of first-time home buyers flock the market and sadly make the same mistakes that their parents and friends did. Given that buying a house is a big decision, the experience can be scary, and a lack of understanding of the process makes it easy to make the wrong choices.
However, if this is your first rodeo as a homebuyer, or it has been a while since your last purchase, you are in luck. We have compiled a list of common home-buying mistakes and how you can avoid them.
Buying a House at the Wrong Time
Given their inexperience, most first-time buyers get into the spring home-buying frenzy. Due to the influx of buyers, spring happens to be the worst time to buy a house owing to stiff competition. Prices are often high, and you pay more than the home is worth. Plus, most first-time buyers don’t pay attention to the interest rates or the prevailing economic conditions
As a first-time homebuyer, avoid spring (especially the month of May) and look to purchase a house in late December or early January. Moreover, pay close attention to the interest rates and only buy when they are low or when the economy is doing well.
Fixating on the House Over the Neighborhood
When house-hunting, the best deal you can get is the worst house in the best neighborhood. However, most first-timers are nitpicky about the house’s cosmetics over the town and community.
Most real estate companies Guelph would advise you to first consider the area and if it matches your values. Ask your real estate agent to track the area’s crime rate and school ratings. Also, ask for a record of property value changes over the past few years and only purchase if the value has been increasing.
Overlooking FHA, VA, and USDA Loans
Given the rising interest rates and housing prices, it is becoming increasingly difficult to own a home through conventional means. However, most Millennials still opt for expensive mortgage loans and overlook the more affordable FHA, VA, and USDA loans.
FHA loans only require a 3.5% down payment and can fill the gap for borrowers with little money saved up. VA loans, on the other hand, are for veterans and active-duty military service members. VA loans don’t require a down payment. USDA loans are for low-income earners and help them purchase homes in rural areas. First-time buyers should make the most of these loans.
Underestimating the Cost of Home Ownership
Once you purchase that house, the monthly bills will keep piling up. Most first-time buyers are unprepared for this. Other than paying up the mortgage, additional costs of owning a home will include property taxes, mortgage insurance, repairs and maintenance, and hazard insurance, to name a few.
Instead, ask your agent or lender to help you crunch the numbers on the total amount required to maintain the house.
The whirlwind of home shopping is exciting but is filled with pitfalls. You should be aware of the many mistakes you can make if you are a first-time home buyer. You’ll get a better chance at making the ideal purchase if you get advice from a trusted realtor.