Posted on Aug 28, 2023 in Blog
Embarking on the adventure of owning your first home might feel a bit overwhelming, especially when friends and family offer heaps of well-meaning advice from their own experiences. The road can be tricky, and those who’ve been through it want to make sure you don’t stumble into the usual pitfalls.
To shed light on these common blunders that first-time homebuyers often make, we’ve put together a list of insights to help you grasp the process without getting bogged down in the jargon.
1. Choosing the Right House
When you’re buying your first home and have a limited down payment, you might be drawn to homes that seem affordable. Houses that look like a good deal in terms of size and location can be really tempting, even if they have some small issues. But it’s smart to be careful. Sometimes, houses that need a lot of fixing up end up costing way more than they seemed at first. You could end up having to spend a lot on repairs after you move in.
2. Considering New Homes
You might have heard that some brand-new home designs can be pricier compared to older ones, but don’t dismiss this option too quickly. While some new homes might have a higher upfront cost, they can offer some great benefits in the long run. You’ll likely have lower energy bills and won’t need to worry about immediate repairs. So, when you’re thinking about what kind of home to choose, it’s important to look at the bigger picture and consider the overall value over time.
3. Figuring Out How Much You Can Afford
Before you get too serious about buying a home, it’s common to use tools that help you figure out how much you can afford to pay each month. But there’s more to it than just the mortgage payment. You also have to think about things like property taxes and homeowners insurance. Forgetting about these extra costs could make you think you can afford more than you actually can.
4. Budgeting for More than Just the Mortgage
When you’re renting, you might not think about all the extra costs that come with owning a home. Stuff like trash pickup, electricity, water, and heating are things you’ll need to pay for when you own a home. Make sure you’re ready for these costs in your budget.
5. Being Flexible When House Hunting
When you’re looking for a home, it’s easy to get stuck on specific things you want. But sometimes, being too picky can make you miss out on great opportunities. For example, if you’re set on a big house, you might end up spending more. But if you find a smaller house that you can expand later, you could save a lot of money.
6. Thinking About the Future
It’s natural to have big dreams when it comes to finding your first home, and sometimes that involves making compromises, especially if you’re working within a budget. One common approach is to imagine that you’ll upgrade to a better home in a few years. While that sounds promising, it’s important to approach this idea with caution. Often, life takes unexpected turns, and what seems feasible now might not be as easy to achieve later. Instead of banking on future changes, focus on finding a home that truly fits your current needs and brings you joy today. This way, you’re setting yourself up for contentment in the present while keeping open the possibility of future improvements.
7. Considering Your Commute
Think about how far you’ll have to travel to work every day. Being close to work and having a good community around you is important. Things change, so being near work and transportation options can make life easier. Our neighbourhoods have short commute times thanks to Anthony Henday Drive, which makes getting around simple.
8. Understanding How Equity Works
When you own a home, you start building equity, which is like a savings account in your house. But in the beginning, most of your mortgage payments go toward interest. It takes time for more of your payment to go toward owning the house. The longer you stay in your home, the more equity you’ll build.
9. Comparing Mortgage Rates
The interest rate on your mortgage affects how much you pay every month and overall. It’s a good idea to try to get the lowest rate you can. Some first-time buyers don’t compare rates from different lenders and just go with the one that looks good. But if you check different options, you might save a lot of money.
10. Being Careful with Customizations
Wanting to personalize your new home is exciting, but it can cost more than you expect. The first price you get usually includes basic features. If you add a lot of extras after that, it can raise the cost. Make sure you understand what’s included in the price before you start making changes.
Starting the journey to owning your first home is thrilling, but it’s also important to make wise choices. By avoiding these common mistakes, you’ll increase your chances of finding a home you love and navigating the home-buying process smoothly.
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