Buying your first home can be extremely exciting and when you’re a first-time home buyer, it all seems pretty simple: find a house you love, buy it, and move in. Right?
Image credit: AlexanderStein via Pixabay.com
Well, not exactly. There are a lot of additional steps to take before you can officially change your address and set up your big screen TV.
Once you find a house you love (after touring 5, 10, or maybe even 20 houses you thought you might like based on the attractive MLS listings), you have to make an offer, wait for it to be accepted, and then hopefully waive any conditions so the Agreement can proceed.
With everything going on, it’s easy to miss things or make mistakes along the way!
Luckily I’m here to help so here are four of the most common mistakes I see first-time home buyers make all the time. (Fortunately,after reading this, you won’t make them!)
Mistake 1#: Not securing your mortgage pre-approval before you start house hunting.
There’s nothing worse than falling in love with your dream house only to find out that you can’t actually afford it. Maybe your down payment isn’t big enough, your income isn’t high enough, or your debt isn’t low enough. Whatever the reason, if that happens, you’ll have to start the entire process all over again.
Before you hit the streets in search of your dream house, be sure to speak with a qualified mortgage broker and find out exactly how much house you can afford. You’ll be able to focus on only those houses that are within your budget and avoid a whole world of disappointment!
Mistake #2: Buying more than you can afford because you forgot to factor in all the extra costs.
One of the biggest mistakes I see first-time home buyers make is buying the biggest, best house on the best block. Unfortunately, even if you’ve been preapproved for the home’s purchase price, you might be surprised at the long list of additional expenses that home buying involves. Here are a few:
- Property taxes
- Increasing utility costs (even higher with a pool, hot tub, heated workshop or garage)
- Property maintenance
- Major home repairs like a new roof or furnace
- General maintenance and/or condo fees
- Appliance upgrades and maintenance costs
It’s important to consider ALL recurring costs associated with your new home, not just its purchase price.
Mistake #3: Not hiring a professional home inspector, or worse, skipping a home inspection.
Electrical outlets that aren’t up to code? A dry basement that shows evidence of past leaking? A roof that doesn’t have proper slope for drainage? You might be surprised at the problems hiding in your future home!
These things might not be obvious to someone who isn’t a trained home inspector, and although some may be quick fixes, others can cost thousands of dollars in repairs, quickly turning your dream home into a disaster home. You likely won’t be able to avoid every surprise that comes your way but hiring a professional home inspector will ensure you avoid many of them.
Even if you consider yourself pretty handy with a hammer, a professional home inspection is ALWAYS a good idea to protect yourself and your hard-earned dollars.
Mistake #4: Going straight to your local bank to get your mortgage.
Most Agreements to Purchase will include a condition about securing financing for your new home. If you’ve been a customer of one of Canada’s Big Five banks your entire life, you might assume that a visit to your local branch is guaranteed to get you the best mortgage rate and possibly even a better rate than the ones currently posted on the bank’s website, right? Not so fast!
Banks often don’t offer or advertise the best rates,regardless of your status as a long-time customer. And in fact, hiring an independent mortgage broker (who doesn’t work directly for any particular bank) can be one of the best financial decisions you make when buying a house.
Here’s why: a mortgage broker has a unique ability to act in your best interests and shop you around to multiple lenders. This helps ensure you get the best mortgage rate with the best pre-payment and other financing privileges, in order to save money and become mortgage-free faster!
About the author: Darren Robinson is a Barrie mortgage broker, dedicated to offering the best mortgage strategies. He helps people qualify for difficult mortgages and loans. Visit his website and blog for home buying tips and mortgage renewal tips or call him at 705.737.6161