Buying a home for the first time is
an occasion too big to not feel butterflies fluttering in one’s stomach. The amount of money at stake is simply mind
boggling and therefore it is advised to be thorough with every detail of the
deal to ensure a happy ending. Not many
get a second chance. Here is a post detailing the very mistakes one must avoid
committing.
Buying
a home in one of the best locations is a dream that everyone would like to
fulfill at least once in his or her lifetime. Those who are able to accomplish
the same are considered lucky by themselves as well as others. However,
consider a situation when you had the best of opportunities to achieve this
dream and by your own minor error of judgment you aren’t able to close in on
the deal the way you would have want to. Not only will it stick like a sore
thumb, the thought of getting so close and yet not through will haunt you for
the rest of your life. It is better to be prepared than to repent later and
therefore, this post will serve you as a primer on the important things to take
note of while investing in real estate and more importantly avoiding the
mistakes that can turn a sweet deal into a sour one.
Not considering the hidden costs
while buying the home
This
is the most common and annoying of all the budgeting mistakes, justifying why
it has been listed above all. Most first time home buyers have a figure in mind
that heavily discounts on the complete costs of ownership, excluding common
fees like appraisal fee, notary fee, escrow fee, which when combined can make a
sizeable amount of money. These all are the closing costs, which, if not
included from very early on can make you house poor, where you will have spent
so much on just buying the home that you wouldn’t have much left to afford the
other expenditures that follow.
Ignoring a bad credit report
Your
credit report is the first thing that a bank official would check before
signing on the approval form of your home loan, and if it doesn’t looks right
it will also be probably the last thing to be checked. Most people
underestimate the importance of credit report.
However, not only a decent credit report will help the finance company
speed track the approval of mortgage, but might also help you get a lower
interest rate on your mortgage. You can yourself check the health of your
credit report through an official website.
A bad credit report notwithstanding, an even worse condition would be to
have no credit history at all.
Not considering home resale value
As
a first time home buyer the selling value of your house, which you haven’t even
bought till now is certainly not one of your first considerations. In spite of
all your intentions to spend a lifetime in the newly bought home, there might
be a situation when you are forced to move out to a different place, or who
knows you might get an even better pad to live on, and in such condition
selling the existing one is only a just and reasonable thing to do. Home buying
is essentially an investment, albeit a long term one and therefore, it is
essential that you make your moves while considering what others also think
about your home, in addition to what you yourself think.
Not budgeting for the home loan
Majority
of the mere mortals have banks and other finance companies for their homes. If
it had not been for their mortgages and home loans, buying a new property would have remained
the privilege that few would have enjoyed.
Not making a budget that takes into account your monthly down payments
is a disaster. The easiest way to stay in clear is make a complete list of what
your existing income and expenses are and then making an easy comparison. Many first home buyers do not go through the
ordeal of this budgeting and consider their rents as equivalent to the monthly
EMIs, making a decision in haste, only to regret it later on.
Author
Bio: Delhi
born Saurabh Tyagi has a penchant for writing, which he discovered early on in
life. He likes to put pen to paper every now and then for topics such as
properties in Kochi, serviced apartments for sale and commercial real estate Noida. Currently he writes on behalf of 99acres.com, a leading real
estate site.
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