A home is always one of the biggest investments an individual makes in their life. Purchasing one for the first time is always going to come with stress, worry, and doubt. These feelings are warranted, however, there are strategies to go into your investment with confidence. Below is a list of the five most common mistakes for first-time homebuyers, and how to avoid them.
Not Being Able to Pay the Mortgage.
Most people understand roughly how much money they make, and what they can afford at the time of the purchase. Despite this, the future is always uncertain. You never know the amount of money you are truly going to have in the upcoming years. Because of this, experts have concluded that you should not allocate more than 28% of your monthly revenue toward a mortgage. Additionally, save up and put as large of a down payment as you can afford. This will lower your monthly mortgage rate and will reduce the loan taken.
Paying too Much for a House
To avoid doing this, put in an offer on a house that has been on the market for a long time. Sellers often overvalue their house early and take some time to realize they need to lower their price. It also costs money to have a home listed, and sellers begin to get frustrated and anxious and are more likely to sell a home cheap. Look for foreclosures, these are always on the cheaper side, and people who once had money when buying their home often cannot afford their home in the future and get foreclosed, resulting in beautiful homes for cheap. Lastly, compare to similar homes in the same neighborhood.
Maintenance and Repairs
The actual price of the house is only one piece of the puzzle. Figure out the amount of money you will need to put into the home, and how much it is going to cost to maintain it. A great home inspector is a worthy investment to make before purchasing a home.
Decrease in Value
A major factor in buying a home, especially a first home, is gaining value in the future. When buying your first home, it is often expected that you are going to eventually want to upgrade or move somewhere else. Finding a home somewhere with great public schools is usually a very strong signifier that a town isn’t going to decrease in value. Look at the prices of homes over the years in the neighborhood, and see if they are increasing. Research the town; has the downtown of the neighborhood improved? Are there a lot of new businesses in the area? Is the town near a nearby city? If yes to these questions, then the home should increase in value assuming it is taken care of well.
Is it the Right Home for You?
The main influence in picking the first home is how you envision your future. Whether you think a house is big enough, has good enough schools, or is just a nice neighborhood to raise a family, is usually hypothetical until you are done having children. Fortunately, if you follow the first four steps, do the proper research, and sell at the right time, moving in the future shouldn’t be a burden on your financial state, and your first home should result in a profitable investment.