Buying a house is likely to be the biggest purchase you make in your lifetime so it can bring with it a roller coaster of emotions from excitement and elation to stress and anxiety. The process of buying your first property can leave you feeling rather overwhelmed and it’s easy to see why first time buyers often make the same mistakes.
Here are some of the most common mistakes made by first time buyers and some tips to avoid them.
1. Inadequate deposit
At least 5% of the property price is generally required to secure a mortgage but this is not usually enough to ensure the availability of the best deals and the most attractive interest rates. Aim to save 10% deposit to get access to the best deals. If you’re struggling to raise a deposit then there are some alternative options such as Help to Buy and Shared Ownership schemes.
2. Putting everything into a deposit
On the other hand, using every penny you have for a deposit can make it difficult to cover unexpected costs of house ownership that might occur like emergency repairs, decoration or buying basic appliances. Keep some savings back if possible, especially whilst you get used to new outgoings that occur with owning a property.
3. Not considering ALL the costs before committing to a mortgage
First time buyers often underestimate additional costs that come with owning and running a home. In addition to being able to afford monthly mortgage repayments, home owners need to pay a list of other costs each month including: Property Insurance, Council Tax, Utilities and Property Maintenance and Repairs. It is also worth remembering that, utility bills and insurances are liable to increase over time.
4. Underestimating how mortgage costs could impact your quality of life
Even if you are able to afford the more expensive house on paper, consider how the large monthly repayments will impact your quality of life. It may restrict your lifestyle and mean you are no longer able to afford non essential expenses such as holidays and luxury items. Other areas of your life may need to be restricted such as your car, a gym membership and expensive presents.
5. Not seeking mortgage advice
The mortgage market is a minefield with multiple options as well as a range of terminology to get your head around. Trying to work it out alone is hard and it is advisable to seek advice from professionals who can guide you and explain things to you. You can get independent, free mortgage advice from Propillo to help you get started.
6. Not factoring in the other costs of a property purchase
Other costs incurred when buying a property include: valuation fees, survey costs, conveyancing and legal fees, stamp duty, land registry fees and moving costs. Make sure you know how much this will cost you before deciding to go ahead with a purchase.
7. Failing to prioritize property requirements for beginning your search
Don’t jump in head first to look for properties. It is important to know which area you want to buy in and other property essentials you need before you register with estate agents and begin your search. If you search for a property before you have identified what property features are essential and which can be compromised on, you could waste a lot of time and effort. Here are some example questions to know the answers to before you start looking for your dream property:
- Does the house need to be close to your job?
- Do you need to be close to schools, shops and other facilities?
- Do you need a garden?
- How many bedrooms are required?
- Do you need a garage or parking space?
- Do you want a project or something that’s already finished?
Buying a property for the first time doesn’t have to be so daunting as long as you’re fully prepared and have all the information you need. Visit Propillo.com today or read our range of handy mortgage guides.