Buying your first Waterloo Region home really does rank up there with some of the most exciting and significant events in anyone’s life. Like any other big occasion though, it is all too easy to get caught up in the excitement of home buying and make mistakes that you will come to regret later on.
Here are the top five mistakes that first-time home buyers make that should be avoided at costs.
Skipping Mortgage Prequalification
One of the biggest mistakes, on a personal level, first time homebuyers make is to begin home shopping before they have obtained mortgage prequalification. Not doing so has left many a first-time buyer heartbroken when they discover that the perfect home that they have found is one they cannot afford after all. Shopping with a set price range is certainly an ideal way to do things, and a mortgage prequalification allows you to do that.
Obtaining mortgage prequalification will also make the general home buying experience an easier one as well, as sellers do tend to look more favorably at potential buyers who are able to prove that they really can afford to buy their property.
Putting Off the Buying Process Until Mortgage Rates are More Favorable
There are those people who do want to buy their own home and are in a financial position to do so, but they put off the purchase in the hope that if they wait a more favorable mortgage rate will emerge. Doing so, however, means missing out on all of the advantages of home ownership for something that may never happen.
If getting the best possible interest rate is of a huge concern to you discuss the pros and cons of taking out an adjustable rate mortgage instead of a fixed rate offering with a mortgage professional.
Many first time homebuyers do not have their future plans mapped out yet and are very much still living in the moment. This is fine and to be expected, but you do need to consider the long-term when purchasing your very first home. Ideally, a first time home should be relatively easy to resell within five years when it is likely that your life plans will be a little more concrete and that ‘starter home’ may no longer fit in
As first timers, too many homebuyers fall victim to ‘impulse buying’ that they later regret. Deliberately turning a blind eye to that basement mould, or those plumbing problems simply because you really love the rest of the home can prove to be a very expensive mistake a little further down the line. As hard as it is, as much emotion needs to be subtracted from the process as possible.
Failing to Calculate the Hidden Costs
Many first time homebuyers do the right thing and crunch all of the numbers involved in a potential mortgage payment to make sure they can actually afford to pay it (and still eat.) Often though they fail to take all of the extra costs involved in homeownership into account and end up financial difficulties anyway.
Taxes, insurance, the costs of maintenance and potential renovation, as well as very basic things like how much the home might take to heat and cool, should all be taken into consideration when you are determining just ‘how much’ home you can realistically afford.