It is no small thing, purchasing a house. It is usually the biggest purchase you will make in your entire life. At one point you will feel excited and ecstatic, the next minute you are feeling overwhelmed, stress and more than a little anxious. This can be a real back and forth of emotional up and downs.
If you are a first-time buyer, it’s hard to appreciate all the trickier parts of this process. Many struggle to just make it through all that paperwork, the professional terminology and the legalese. For this reason, it’s not hard seeing why so many first-time property buyers make many of the same mistakes as one another.
In the following post, however, we aim to help you take on the challenge of making that first-time home purchase without falling into the same traps so many people have in the past.
Not Calculating All Costs Involved in the Process
While you may think you all about mortgages and the repayments you need to make on this kind of financial product, there more costs you need to consider when buying a home. Some of the other main outgoings many fail to consider includes the repairs and maintenance on the property, their utility bills, council tax, life assurance and property insurance.
Furthermore, expenses like insurances and utilities are the kind that will increase and decrease over time, so this needs to be accounted for too.
Not Making Sure You an Adequate Deposit
Generally, the deposit will be, at the very least, around 5% of the selling price. If you can, it’s always advisable to save up a little more than that number though. Why? Because you will be able to benefit from better interest rates and deals if you have a bigger deposit to use.
Many are tempted to spend all their life savings (up until that point) to pay the deposit on a property. However, this could be a huge mistake. While it makes sense on paper, it’s better in the long run to take a bigger mortgage and still have some savings in the bank for when you need them. Especially in those formative days, weeks and months when you are still learning how to cope with the impact on your finances.
You need to also think about other expenses that may come up, such as blocked drains, leaking roofs, broken boilers and a whole lot more.
Not Really Understanding the Amount of Money You Can Borrow
Avoid overstretching your budget. Although you may have the money in your accounts at the present to afford high level repayments on mortgages, a bigger and more expensive property, think about the affect this may have on the life you can afford to have.
You need to calculate the size of mortgage you can really afford. You will find there’s a variety of different factors lenders think about when assessing your affordability, like:
- Income, including salary
- Normal and regular household bills
- Outgoings, including credit cards, debts and loans
- Childcare costs (if applicable)
- Credit Score
- Living costs
- Size of deposit
- Travel expenses
Not Consulting Experts for Advice Before Buying
It’s never advisable to take it all on yourself when you are buying a house and dealing with the real estate market. Mortgages are not something, unless you have financial expertise, that you want to take on yourself, without professional advice as there are so many different rates, lengths of terms and fees you need to try and understand.
You need to look to the professionals. When seeking out these individuals though, be careful and do your research, ask your friends and relatives, look at reviews and testimonials.
Remember there Are Yet More Costs Involved
There are even more costs you need to consider beyond those we’ve already looked at and covered here. Beyond the mortgage fees, there are also
- Valuation fees
- Stamp duty
- Land Registry
- Legal and Conveyancing fees
- Removals Costs