It’s becoming more common for people to wait until their 30’s before they purchase a property. After all, with deposits needing to be at least 10% of the property’s worth, it’s a cost which is too much for young people. However, if you do have enough money to purchase a home, you need to make sure you are making the right decision. After all, you don’t want to get a mortgage which is going to get you into debt in years to come. Here are some financial errors people make when buying their first home.
Not getting mortgage advice
Unless you want to be one of the thousands of people who get their home repossessed, you need to make sure you are taking out a mortgage which you can afford. After all, so many people overestimate how much they can payout every month. They don’t consider all the extra bills they will have to pay for. Therefore, you need to make sure you get some solid mortgage advice before you put yourself under financial strain. They will work out your monthly outgoings and check if you can afford the costs. After all, you might not have considered the extras such as taxes, interest, and insurance. As this article says, once you have a total monthly amount you need to payout, it shouldn’t exceed 28% of your gross income. Otherwise, you should reconsider buying a property at this current time.
Not assuming you have good credit history
A lot of people presume they will have good credit history as they haven’t been in financial trouble before. But you might not even have any credit history! If you haven’t paid off a monthly bill before, your credit history will stand at zero. And if you have no credit history, you will struggle to obtain a mortgage. After all, they need to check that you have successfully managed to pay off a debt before. Therefore, it’s so important to build up some credit history before you go for a mortgage. It might be that you take out a credit card and start spending. Just make sure you pay the bills back quickly so that you build up a good credit history. Or you can even get a credit builder loan. It enables you to build credit and save at the same time!
Not checking out real estate market trends
Unless you want to be in financial woe in the future, you need to look at real estate market trends before you purchase your first house. After all, you don’t want to buy a home which will cause you to have a loss when you sell up. You want something which will ensure you have a nice little fund to put towards your next place when you come to sell. You can look online to find a guide to what homes are selling for in the area. And you can also read up about the latest market trends to be assured you are making a wise financial decision.
And when you are buying your first home, make sure you have a good idea of all the costs at the start. After all, you don’t want to end up with a conveyancing bill that you can’t afford!