Three Common Mistakes that New Homebuyers Usually Make
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New homebuyers are often overwhelmed at the prospect of getting a new home, and this excitement often leads to committing common yet very costly mistakes. Whilst many seriously believe they are prepared for what could be the biggest transaction in their lives, the reality is that most are simply not ready for all the responsibilities that come with a new home.
Forgetting to inspect the property Many are so excited at the idea of getting a new home that they often fail to inspect the property before shelling out the money. Even if the real
estate agent says that the
house is in good shape, it does not hurt to take another look and check for signs of damage, cracks, and the odd smells. New homebuyers should take the time in inspecting attics and
basements,
along
with
the
mechanical rooms. These places are more prone to termite infestations and leaks.
Going over the budget
New homebuyers often want to impress their friends and family members by showing that they can now afford their own property, and this means they are more likely to buy pricier homes than practical ones. A lot of this comes from lending the maximum they can from their banks, which means there is less leeway for other expenses such as maintenance, water and electric bills, and moving costs. If a person suddenly loses their job, they will have a more difficult time paying for their loan if they go over their budget.
Picking the wrong kind of mortgage term The most common type of mortgage is the 30-year fixed-rate kind and whilst this is the most economical choice for first time buyers, many commit mistakes when choosing the right term. Fixed-rate mortgages usually have two terms: 15-year terms and 30-year terms, with the latter being the most common. It is important to take note of the advantages and disadvantages of each one before choosing on a term. For example, while a 30-year term means payments are less, interest rates are higher.
A house is a big investment and these are some of the common mistakes first time homebuyers should be aware of and avoid when buying a home. It is important to research on the property and stay practical when it comes to decisions.
References: https://www.housetree.co.uk/ http://www.investopedia.com/articles/mortgages-realestate/08/home-inspection.asp http://www.telegraph.co.uk/finance/personalfinance/borrowing/mort gages/10299959/Best-fixed-rate-mortgages-two-three-five-and-10years.html