Buying a house when you are young has its own ecstasy and adventure as it is not only a feeling or achievement but also an added responsibility on your shoulders. The entire process of shopping around for that dream home, finding it, managing finances and then decorating your new home will give a feeling of pride and satisfaction at the end. Of course, everyone goes through a lot of dilemma, brainstorming and indecisiveness during the process but it is worth it at the end.
Young home buyers tend to enjoy the home buying process and often want to pace up things to get their dream house. At these times, they tend to make mistakes which may cost them really heavily. Unintentionally or otherwise, people tend to ignore essential things that must be considered when buying a home. It is observed that youngsters are often found making these mistakes for which they repent later. Find here, the top seven mistakes made by new young home buyers. These mistakes should not be made by any potential buyers and are worth checking to avoid any losses.
Common mistakes made by youth when buying a new home:
Avoid pre-approval: The new age population likes to find things online, they think in digital terms which may not be the best idea when making a property purchase. To manage finances for your first home, you actually need a pre-approved mortgage for which you need to visit the lender and show all the documents regarding your income, debt, credit, assets and more. This will aid in creating a financial picture and based on this image, the lender would draft a pre-approval letter for you. The letter suggests that you are qualified to buy a home but does not give guarantee for money. Sellers give preferences to buyers who show a pre-approval letter because with the letter they can understand that you are actually qualified for the mortgage. This is an important step for sellers while considering you as a potential buyer of property and so it is advisable you get a pre-approval letter.
Not choosing a real estate agent: Young buyers search everything online and would often choose sellers through online listing services. This can be a big mistake as the houses in the list may not be the most suitable bet for you. Looking at photos is far away from actually visiting the property or getting updates from someone who has already seen it. You need someone who would walk you through a property and show the actual condition with details. Although, real estate agents are bound to the seller and may not give you the best benefits, they are still more accountable than any online service. So, if you think that you don’t need a real estate agent that deals with property then think again. You might be at loss.
Wrong estimation of monthly mortgage payments: When you search property online, you get an estimated mortgage payment which may seem affordable but may not work out at the end. The main reason is that the estimated payment may not include taxes, insurance, HOA fee etc. especially when you can only manage a deposit that is less than 20% of the actual price of the house. In practice, you will have to pay all these charges and so, you may end up getting a deal that proves really pricey. To avoid such cases, you need to calculate an amount that is inclusive of everything so as to get a monthly mortgage payment that fits in your budget. Otherwise, it is advisable to search for a home in a lower price range.
Not going for a mortgage: When you are in a hurry to buy a home, there are chances that you tend to make an offer the minute you like a home. You just can’t wait to grab that deal. Well, you need to get out of this restlessness and pause here to search for an effective mortgage deal. It is not necessary that you go with the lender who offered you the pre-approval letter. Instead you must choose a lender that offers mortgages at the lowest interest rates. For this, you need to shop around and find a lender that is most suitable for you. Without a mortgage lender, you may shell out hundreds of thousands of pounds on interests and so, it is not an advisable practice.
Skip the home survey: This is one of the most significant steps in the home buying process and cannot be skipped. You need to arrange for a home surveyor and get the entire property inspected. Moreover, it is in your best interest to accompany the surveyor during the home survey visit so you can get the actual details about the flaws in the property. There is no point sending your family members if you can be the best judge of the scenario and are managing the finances needed for repair. By being present, you will get an estimate of the actual cost of the home which would include minor or major repair works spotted during the survey. Therefore, you should never skip the home survey and arrange for it as soon as you select a home.
Not taking home warranty: Home warranty is an agreement for repair or replacement of wear and tear of appliances and systems present in the house. You may find the process boring or time consuming but you must ask for this warranty while closing the deal with the seller. Unless it is a new construction, there are full chances of small or large damages in the house and if you don’t take the warranty then you need to pay for the repairs. To avoid this, you need a home warranty that saves you from shelling money in repairing the routine wear and tear of building as well as appliances and systems.
Not considering the resale value: While buying a home, you should also consider the resale value of the property. There are chances that you may want to sell the property sooner or later and thus it is a vital step to consider the resale value of the place. If you make additions like placing new furniture or kitchen countertops and other fixtures then that cost would be added in the resale price. This will help you get a good value for money whenever you plan to sell your home. Therefore, young buyers should never forget to factor resale value when buying a home.
When you comprehend all these points, you will find that its sheer negligence that results in big loss of money by taking small little precautions, you can make sure that your first house is not synonymous to short term gain and long term pain.
You can get more of such information and guides on our website Freepricecompare.com or you can also benefit from our comparison tool that gives quick comparison of mortgage providers in the UK. If you have more questions and need personal advice then you can call our ever responsive team of home insurance experts on 08008807656.