There are few things in life as exciting as buying your first home. Unfortunately, first-time buyers often get carried away in the process and make unnecessary mistakes. Below are essential tips to follow when buying your first home.
Know what you want
It sounds obvious, but it’s difficult to keep a clear view of what you want with so many options and opinions from well-meaning friends and family. Make a comprehensive list of must-haves before starting your property journey.
There is a big difference between what you want in a property and what you need. Why not create a wants versus needs checklist, considering:
- Type of home
- Amenities in the area
- Location and Neighborhood
- Size of property
- Features – home office, walk-in wardrobe, etc.
- Outdoor space
- Energy efficiency
Having a clear list of must-haves will keep you focused. Carefully consider how long you want to live in your first property. What is most important to me? Is this where I will raise my family? Do I want this property to be an investment opportunity? Am I willing to take on renovation works?
Even though you will require plenty of expert advice along the way, you need to educate yourself as much as possible before embarking on your homeowner’s journey. By preparing and educating yourself as much as possible, you will become an empowered home buyer. You should view this process as a project and yourself as the project manager.
Secure your finances
Do not start looking at properties before you have secured your finances. A big mistake a lot of first-time buyers make is falling in love with their dream home without first getting approval for what it will cost. You may have a rough idea of what you can afford or what you would like to afford, but this can often be far from reality. By securing your home loan before you even start looking, you will save yourself a world of pain and frustration. The first step in your property journey is to choose the right mortgage adviser and get pre-approval of your loan. An experienced mortgage adviser can give you a complete picture of loan type, interest rates, down payments, and additional costs, giving you an accurate bottom-line figure. Many of these services have now moved online, and sites like this can quickly review offers and provide you with the results in one format.
Keep in mind you may be approved for more than you might expect, but be careful. What you are approved for and what you can comfortably afford might be two different things. Calculate what you can comfortably afford to pay each month, considering all the added expenses that come with owning our own home, such as maintenance, taxes, utilities. Normally it should not exceed 28% of your monthly income.
Get your paperwork prepared before speaking with a broker, proof of income, identification, bank records, etc. Being prepared in advance helps reduce stress and means you can get your mortgage approval fast. Don’t ever sign documentation you are unclear about. Discuss any doubts or questions with your mortgage broker. They have all the expert knowledge and can easily answer questions you have.
Find a good real estate agent
Don’t just go with the first agent you find or the one listed on your property of choice. It is essential to have an agent who will keep your best interest in mind. Research what the best agencies in your area are. The important thing is to find an agent with who you communicate well and are known for being helpful and having a high quality of customer service. Be very clear with your agent that you want to stick to your loan approval amount and that they only show you properties within your price range. Your real estate agent will also help you with your home appraisal once you have found your dream property. A property appraisal is primarily for your mortgage lender to determine your final loan amount, but it is also essential for you. You are purchasing your property for an accurate and fair price, or even better, that you might get a deal.
An agent has at hand all the market research and information on the best neighborhoods and potential investment properties. When negotiating, deliberate every offer and counteroffer, don’t be rushed to any decision.
Lastly, always listen to your gut! Don’t let anyone else make your final decision for you. Remember this will be your home, the place where you raise your family and enjoy your life.