The thought of buying a new house and starting a new life can truly be exciting. However, if you’re a first timer in buying a house, your knowledge might be quite limited. But that’s okay, you can do all of that along the way with a little research and some inputs from reliable people. To give you a heads up, here’s five money-related mistakes that first time home buyers usually make.
Not Anticipating The Down Payment
As first time buyers, it’s hard to know exactly how much the down payment is and how much the lending or mortgage programs allow for you to borrow. The best way to go about this is to have a lot of savings on hand just in case it’s more expensive than expected.
Wasting an Opportunity to Negotiate
It’s okay to negotiate. This can lead you to very big savings, your future self will thank you. Were there any damages in the house that could maybe reduce the selling price a bit? Or is the seller amenable to paying any of the closing costs? Work around what you have and try to come up with a favorable agreement with the seller and the real estate agent. Also, some sellers will bargain with you to get the house off the buyers market. You just might get a very good deal!
Being Unaware of the Limits of Home Inspection
When the time comes for home inspection, make sure you know what’s covered because some of them don’t test for things like pests or mold. The usual inspections include checking the electrical and plumbing systems, but always feel free to ask the inspector to take a closer look on something. Anything that comes out of the report can influence your decision to buy the house or not. And this may lead to a good negotiation too, which might lead to you save more.
Forgetting About Closing Costs
Aside from the down payment, some first time home buyers also overlook the cost for closing the mortgage. It is said that 2-5% of your loan amount or of the price of the house is the usual rate. The best thing to do about this is to go around and compare prices until you’ve narrowed down to something suitable for you, or you could negotiate with the seller or your real estate agent as well.
Not Setting Aside Money for the Move-In Expenses
It’s already expected that buying a new home requires a lot of money, so it’s also important to know where it’s going. Not only are you paying for the house itself, the legal documents, or the mortgage or closing costs. You also have to consider the move in expenses — furniture, appliances, or any other improvements necessary to make your new house be in its best condition. Don’t forget a traditional housewarming party to make it official!
This is just a heads up for you to learn from other people’s mistakes. You will surely have so much fun in this journey. Before you go, here’s a quote for you: “A house is made up of walls and beams. A home is made up of love and dreams.” With all that said, I wish you all the best in buying your new home!