Buying a home is rarely ever straightforward. As a first time buyer, it’s easy to make mistakes while trying to negotiate the process. Some of these mistakes could be very costly and could even prevent your purchase from being improved, so it’s worth being aware of them so that you can avoid them. Below are just a few common first time buyer mistakes to avoid.
Waiting until the end of a rental agreement to get started
Applying for a mortgage can be a long process – sometimes taking six months or more. When buying a home, you typically join a chain. If there are delays up the chain (perhaps the seller is unable to move into their new property yet) then you can end up waiting. It’s for this reason that you shouldn’t wait until the end of a tenancy agreement to start making your application – you could end up coming to the end of your tenancy before your new home is ready to move into (or even before your mortgage has been approved). Start the process six months before your tenancy ends. It could be worth telling your landlord about what you plan to do and letting them know how the process is going – a good landlord won’t make you homeless and will extend the tenancy until you can move out.
Shopping for a property before shopping for a mortgage
It’s best to get a mortgage quote first before looking for homes. This way, you have a clear idea of how much home you can afford. Some people get their heart set on a home and then apply for a mortgage, only to find out that they’re unable to get approved for a mortgage that large. Others agree to buy a low value property and then realise they could have afforded a lot more when applying for a mortgage. This is why you should look for a mortgage first. Check out some tips here when it comes to applying for your first mortgage https://etspeaksfromhome.co.uk/2022/01/tips-for-getting-your-first-mortgage.html.
Taking out loans during the buying process
Mortgage lenders will typically require you to give them bank statements dating back the last six months. This is so they can take a look at your expenses and income to make sure that you’re not living beyond your means. If you’ve been borrowing lots of money in the last six months, lenders may assume that you’re not living within your means and they may reject your application. Aside from small credit card purchases, avoid taking out any new loans six months prior to making your application in order to guarantee approval.
Switching jobs six months before applying
Most mortgage lenders also want to see that you have a steady income. If you’ve switched jobs in the last six months (particularly more than once) your application will likely be rejected, because it shows that your income is unpredictable. If you’ve been thinking of getting a new job, aim to start your new job at least six months before applying for a mortgage. Alternatively, wait until your mortgage has been approved and you’ve moved into your new home to start looking for a new job.
Settling for a mortgage that’s expensive in the long run
Many first-time buyers focus on reducing the upfront costs such as the deposit. However it’s also important to consider your monthly repayment costs and your interest rates. A mortgage with higher monthly repayments and high interest rates could be very expensive in the long run. By using a mortgage broker service such as https://www.justmortgagebrokers.co.uk/ you can get a good mortgage that has low upfront costs and relatively low rates, so that you’re not paying too much in the long run.
Skipping the home survey
A home survey is a professional inspection of your home. It is different from a mortgage valuation – the aim of a home survey is to find out what condition your home is in and whether there are likely to be any expensive repairs around the corner. Investing in a home survey could prevent you from buying a home that could be expensive to maintain in the future.
Not budgeting for all the extra buying fees
There are many extra fees to budget for when buying a home beyond the mortgage deposit. You will likely have to pay a valuation fee and solicitor fees. If you’re getting a home survey (which as mentioned is recommended), you’ll also have to pay for this. Finally, there are moving costs to consider. This could all cost an extra couple thousand pounds. Make sure that you have this extra money in your bank on top of the deposit so that you can afford to buy a home.
Disclosure: This is a featured post.