If you are looking forward to buying the first property in your life, do your best to avoid some of the biggest mistakes with this type of purchase. Buying a home may be one of the biggest in your life, but it may not be one of the hardest. - Momo Kanev
One of the most common mistakes is buying a home without knowing your own finances. As we have learned from the financial crisis, what banks determine that you can afford as a monthly expense does not always coincide with your judgment. To begin with, make a list of your monthly expenses - for car, food, loans and credit cards, insurance, and more. Don't forget the big payments you make once a year - holidays, insurance, taxes, and more. After these accounts, you will now have a clearer idea of how much more you can spend to buy a home. It is very likely that you cannot afford the desired neighborhood and area of the property. If so, and you have no opportunity to earn extra income, consider reducing your current expenses.
Pay attention to the cost of purchase fees, as well as the costs of insurance, repairs and property maintenance. Becoming an owner will certainly increase your monthly expenses. The smartest option is to collect all the expenses for the year and divide the sum by 12 (so you will have an idea of your monthly expenses). If you can afford to allocate $ 1,000 a month for a home, deduct the costs of fees and maintenance. The balance is the money you can spend to service your mortgage loan on your purchase.
Often people make a purchase without knowing what amount they can expect in the form of a bank loan. To avoid this mistake, start selecting a property only after you have received prior approval from the bank. Otherwise, you run the risk of wasting your time and ultimately find that the bank will not lend to you in the expected amount or do so under unacceptable conditions. If you have already repaired the property, you may lose the deposit.
First-time homebuyers often have to compromise with noisy streets, no view or floor they do not like, unscheduled repairs because their funds are limited. If you are not willing to give up on your original desires, consider renting until you find the perfect home at an affordable price. However, it is best to make a list of the features you really desire and those you can compromise with.
5. Plan Ahead
If you decide to compromise on your first purchase, don't let important things skip your planning stage. For example, it is not appropriate to buy a one-bedroom home if you are planning to have children and know that you will need at least two bedroom apartment. On the other hand, being too picky can make you lose a really good deal. If you do not like the tiles in the bathroom, buy the property and make repairs after a while.
6. Location, Location, Location
Of utmost importance is the location of the dwelling and the infrastructure in the area. What is the transportation to your work, are there any convenient facilities nearby - kindergartens, shopping malls, police stations, hospitals, etc.
Very often, real estate sellers make cheap improvements to raise the sale price. Such tricks can dazzle more inexperienced buyers and have you pay tens of thousands more for improvements that are much lower in real value. It's a good idea to look for a property whose potential is not fully exploited and the improvements you make will allow you to resell it at a much higher price over time.
Don't underestimate your surroundings. Before you make a purchase, gather the maximum amount of information about the neighborhood in which you will live - what are the urban plans, any unused land and what will be built on them. Otherwise, it may turn out that in five years, your backyard will have a main street. All this affects not only your peace of mind, but also the price of your property over time.