Are you looking for buying your own dream home? We know how it feels when you stand in front of a property that is for sale. Whether you like the property or not, it will make you feel a step closer to your dream.
You may want to purchase the property as soon as possible. But we will suggest not to make hurry in such serious matter. Undoubtedly, the purchase of property is always associated with lots of legal works.
Apart from that, you should also remember that new property purchase is a cost-effective task. You need to pay several types of payments such as property tax, residency charge, home insurance, renovation of the house, etc. It has been noticed that first time home buyers tend to make some mistakes that can generate a financial crisis.
Here we will talk about such mistakes to know you and show you how to avoid those.
Mistakes that every new home buyers often make
Unable to figure out the budget
We understand how it feels when you are quite near to your dream house project. You may hardly think about the budget. Now from this point, there begins the problem.
Without analyzing the budget you can afford, it may lead you towards a financial crisis when you jump for comparatively higher price property. Being a first-time homebuyer, it becomes difficult to choose a budget to not create a problem in the future. Generally, people forget to plan a budget and proceed without having any assumptions of upcoming financial health.
Limiting ability by looking at one quotation
Even after planning a budget, some people perform a great mistake by not adhering to more than one quotation. While purchasing a property for the first time, you may meet a house broker for getting the best available house for sale. Now, they usually have lots of options starting from low to high.
Moreover, many brokers only deal with properties that are too posh and are of high price. In such a scenario, many first time home buyers fail to choose the right one and depend upon only one broker. While they depend upon one broker, it clearly hints that new property buyers will only rely on a single quotation.
Being depending upon a single quotation, they fail totally and stick to only one budget. It may be high or may be low.
Without reviewing own credit report
During purchasing a property, you may have to look for a house loan. We appreciate this and advise you, looking for loans without guarantor from a direct lender. However, even after applying for loans from direct lenders, there will be a thorough check.
Your credit report, financial history, repayment background all will undergo a check and only after those lenders will decide whether you are eligible for the loan or not. Thus, if your credit report is not up to the mark, then it is a serious issue indeed. Without having a good credit score, you may not qualify for a house loan.
If you have already started the work of buying property, then it is really difficult to cope with the scenario. Due to skipping the credit check, you may face huge financial loss.
Unable to make the good down payment
The rule of a down payment has been introduced due to the security of the seller or broker. While purchasing a property nowadays, almost every seller asks for a payment that contributes to the property’s total cost. Therefore, if you pay only a nominal amount in the form of down payment, it will ultimately fail to serve any benefit.
Besides, you need to pay a similar or more amount of money after some days to process legal papers. We have seen many new home buyers often regretted about low down payment. On the other hand, a high amount of down payment will save you from borrowing huge large liability of loan.
Ways to avoid mistakes for new home buyers
Design a budget
Before proceeding with looking for a property, make sure how much you can afford. Being a first time home buyer, it is difficult to choose the ideal budget. One and the only way to resolve the issue is by viewing different property reselling websites.
On those websites, you will be able to see different price range as per the category of house. You will find a list of properties which are of different prices. Therefore, you can easily gain knowledge about the basic cost of a property. Now, based on that idea, make sure how much you can spend.
Do not stick to one
Perhaps you do not have any time for research. In such a situation, you can contact a broker who can provide you several information about different properties. Now while choosing a broker, make sure he is honest and qualified enough.
Moreover, the broker will guide you with the expected quotation to simplify your calculation of the budget. We always advise not to stick with one broker rather look for at least more than one broker. Different brokers will provide you with different quotations. Go for the one that suits your budget the best.
Don’t exhaust all your savings
We have seen people exhausting all their saved money for the future or even for an emergency fund to purchase a property. Now, this is something completely unacceptable because you never know when and how you are in emergency requirement of funds. Therefore, we suggest not using all those savings to purchase the house.
Rather it is better to look for loans without a guarantor from a direct lender. It will help to ease your financial health even after purchasing the property.
Make sure you know the benefits of different programs
The Government of the UK has started many programs for first time home buyers. Generally, these types of programs are associated with financial help. For this reason, if you apply for those subsidies, then it will reduce your expenditure amount.