Common First-Time Mistakes to Avoid when Purchasing a Home

Diana Smith, November 19, 2021

Buying a home for the first time often comes with many important decisions, and can be as challenging and overwhelming as it is exciting. Unfortunately, it can be quite easy to get caught up in the chaos of home browsing and buying and make easily avoidable mistakes that might cause buyer’s remorse in the future, especially for first-time buyers. To help you make this process a bit easier to manage, here are some of the most common homebuyer mistakes, as well as advice on how to avoid them:

Not applying for a mortgage

Many first-time homebuyers make the mistake of viewing houses before they even consult a mortgage lender. Although this might not seem like a big error, today’s market is quite tight and competitive, with significantly more buyer demand compared with the number of affordable homes available on the market. In such a challenging climate, chances are high your offers won’t be taken seriously unless you have cash in hand or a mortgage preapproval. This is because no seller would want to take risks on individuals who aren’t even certain they could acquire a mortgage, particularly if they have a number of other offers waiting.

Overlooking the hidden costs

Buying a home involves much more than just monthly interests payments; the often-overlooked costs of owning a home can quickly add up as well. From property taxes and homeowners and mortgage insurance to maintenance, repairs, and utilities, there are a number of hidden expenses you need to take into account as well. Due to this fact, it’s never a good idea to buy more than you can afford, and it’s recommended to shop around for mortgage rates and insurance coverage in an effort to find more affordable solutions that will make your homeownership expenses easier to manage.

Not working with a broker

In countries like Australia, working with mortgage brokers is an essential aspect of the home buying process, and for a good reason. Here, locals tend to hire the best mortgage broker in Australia that will help them make their homeowner dreams come true. By having access to all major banks and dozens of third-party lenders, an experienced broker can provide personalized home loans and more favorable interest rates that will better suit your unique needs and requirements. With that in mind, working with such a professional mortgage broker can always be beneficial, no matter where you live.

Assuming high down payments

While a 20 percent down payment might be the norm around the globe, in places like the US the down payment can often be lower, with the median being around 12 percent. With certain loans such as FHA and PMI, the down payment for Americans can even be as low as 3 percent. For that reason, it’s recommended to research all loan options and check with real estate agents for any special community requirements in an effort to budget accordingly. However, keep in mind that higher down payments often come with lower or even no required mortgage insurance.

Allowing emotions to take over

Buying a house for the first time is one of the most important choices you will ever make. It’s a place where you’ll likely start an independent life and create lasting memories, making it quite easy to get overly attached to the houses you visit. But as buying a home is a major financial investment as well, hasty decisions could lead you to overstretch your budget or overpay for a property. Instead, aim to stick to a predetermined budget you can truly afford, and never get emotionally invested in a home that’s not yours yet.

Buying your first home is often quite a personal and emotional process. But by following the helpful tips mentioned above, it can also be a more seamless endeavor, and smart investment as well.