As a first-time home buyer, it is likely you’ve been hearing all kinds of advise from friends and family about what to do and what not to do with your first purchase. It can be daunting making such a huge financial decision, and in the excitement of getting their very first home, first-time homebuyers are prone to making a lot of costly mistakes.
Before you even start browsing for houses for sale in Rye or surrounding suburbs, read on to find out the top mistakes first-time home buyers make and avoid them:
Not getting pre-approved
So you’ve decided it’s time to take the next step in your life and be the owner of your own property. What’s the next thing you do? Start looking for houses to buy? No! The first thing you should be doing is going to a bank or lender and getting pre-approved for a loan. Not only does it tell you exactly how much you can borrow but it also saves you the heartache that comes with falling in love with your dream home and later finding out that you can’t afford it. Moreover, coming to a home seller with a pre-approved loan indicates to the seller that you are a serious buyer and they may be more willing to entertain you. Finally, getting pre-approved for a loan takes time. And with the property market as hot as it is right now, your dream home could get snatched up by someone else by the time you find the right bank to get you a pre-approval.
Not comparing interest rates
No two banks or mortgage brokers will lend you the same amount at the same interest rates. It is important to shop around for the best rates before choosing your lender. A major mistake first-time homebuyers make is going with the first lender to make them an offer, simply because they are unaware that they have the choice to find another. Don’t rush into choosing the first lender you come across, but take the time to shop around and get in touch with different lenders and banks, discover who’s offering the lowest interest rates, lender fees, best loan terms. Also pay attention to their customer service and how long they take to respond to you. All of these will be a great indicator of how well your journey with them will go.
Buying to your limit
Many first-time home buyers make the mistake of thinking that their pre-approval amount is the actual amount the bank or lender is willing to lend you, and buy a property that is worth exactly that amount. It is always best to borrow only as much as you can see yourself paying off. When deciding on your budget, also consider all the extra costs that come with buying a house, including stamp duty, transfer fee, mortgage insurance, conveyancer and financer fee as well as the ongoing bills you will have to pay when you move into the property. Also keep some money away for a rainy day and regular maintenance when calculating how much you can pay on your mortgage each month. You don’t want to end up with no money in your pocket to pay for groceries at the end of the month because everything you earned went towards paying your mortgage.
Not researching the neighbourhood
When buying a house, you’re buying into a neighbourhood. Even if you don’t plan on interacting much with the people living around you, the facilities available to you in the neighbourhood will matter. And when buying a house, think ahead to your plans in the future. If you’re a young couple, think about whether you plan on having kids in the near future, and whether the area has good daycares or schools for your kids to study in. Also consider how close the nearest emergency hospital is, as well as basic amenities like grocery shops, major shopping centers and the nearest public transport station. And when buying real estate in Rye, also consider the proximity of your house to the nearest beach. While you may be able to get a cheaper house that is a little far from the beach, isn’t the whole charm of living in a coastal suburb being able to step out of your house and walk to a beach in less than 10 minutes?
Skipping pest and building inspections
While most mortgage lenders make it compulsory for buyers to get a pest and building inspection conducted before they agree to lend the required money, many others may not. Even if your broker doesn’t make it mandatory, it is always a good idea to get these two inspections done prior to signing any contracts. While your initial inspections will tell you a lot about the appearance of the house, a building inspection will be able to detect faults in the foundation, paint, plumbing, insulation and whether there is a termite or other pest infestation. Spending a little money now can save you tens of thousands in maintenance and rebuilding costs later.
When buying real estate in Rye, taking care of the above points will ensure you get the best deal.
