Your long-awaited moment is here. You are finally getting the dream house that you have always wanted. But wait! Are you aware of everything that comes with buying a home? Unfortunately, many people make plenty of mistakes that can become a hurdle in the process of acquiring a home.
Buying a home is like a once-in-a-lifetime opportunity (unless that’s what you do for a living). Unfortunately, many first-time homebuyers get over-excited with the very feeling of owning a home and neglect important factors. These can lead to problems later on down the line. So here are the common mistakes that many homebuyers tend to make that you need to avoid.
Not keeping tabs of your credit
- Nobody enjoys bad surprises, right? Especially when it comes to purchasing a home. Mortgage lenders may offer you less-than-ideal interest rates and terms if you or your spouse have evident credit difficulties, such as a history of late payments, debt collection actions, or considerable debt (or deny your application outright). Either situation might be aggravating and cause you to miss your target deadline.
- Check your credit report for free each year at annualcreditreport.com from each of the three credit reporting agencies: Transunion, Equifax, and Experian, to avoid difficulties in the future.
- Examine for inaccuracies and file a written dispute with the creditor and the reporting agency, including any supporting paperwork. Consider using one of the best credit monitoring programs for more proactive assistance.
- There’s no way to swiftly delete current but accurate negative things from your credit history, such as late payments or overdue accounts. They will remain on your credit report for seven to ten years. However, you may improve your credit score by paying your bills on time, making more than the minimum monthly payments on your debts, and not using all of your credit. Above all, exercise patience; a low credit score can take a year to improve.
- Also, verify if your bank, credit union, or credit card company provides free access to your credit report. If your credit score is below 620, you may have difficulty receiving a traditional loan. But you can apply with an online loan lender to get instant short term loans in Canada. Neverthless, make sure you have a good credit score before applying for a home loan.
Looking for a house without getting pre-approved by a lender
- While buying a house, you will often come across a pre-approval process. Here you need to understand pre-approval and pre-qualification are two very separate things. The pre-qualification is the first step to getting pre-approved.
- Pre-qualification allows you to understand the prices of houses in your area. Often when you are buying a house, having a pre-approved letter shows the seller that you are serious about getting a house and will help you attract the sellers’ attention.
- In addition, while buying houses, there are other competitive buyers, and sellers won’t entertain you for long if you do not have the pre-approval letter.
Not figuring your price and needs
- Figuring out what you need and how much you can afford is critical to choosing the right home as per your needs. Unfortunately, so many times, new buyers are too excited with the thought of buying a house that they simply jump into the real estate, choose a house and mortgage easy EMI option that won’t keep them up at night.
- However, buying a house is not that simple. You need to find your needs and how much you are willing to spend.
- If you are looking at houses that are way out of your budget, you are only wasting your time and energy, whereas if the houses are way under your budget, they may not offer what you need and can be frustrating. After determining these, you can start finding an ideal home.
Making too small a downpayment
- In the current market, many lenders offer low down payment or even zero down payment options to people, and it may be a good option at some particular time.
- However, one in nine homeowners regret making small or no downpayment and say ‘they should have waited to make a bigger downpayment.’
- Making a small downpayment can unnecessarily extend the payment duration, and you may risk losing the asset as the real estate prices are volatile. In such time, understanding your other expenses and analyzing your savings can work wonders.
- Check how much your expenses are and how much you can afford to pay without putting any extra burden on your finances.
Not checking out the surroundings
- Many times, first-time home buyers buy a property without checking the surrounding areas.
- The worth of your property and the experience you will have while living there is directly proportionate to your surrounding areas.
- Check the availability of basic amenities, such as groceries, food stalls, markets, schools, malls or hospitals. In addition, also check the entrance for ease of access. Finally, check if there is any ongoing construction happening around your home that may affect its value in the future.
Sucking your savings dry
- It is not a great idea to put all of your savings into buying a home. If you are buying an old home, it is almost certain that it will require some repairs.
- It can be frustrating. In the case of a new home, putting your savings into a down payment can leave you vulnerable to financial difficulties. However, you can get instant, short-term loans in Canada to meet immediate expenses.
- However, ensuring that you put a portion of your savings into downpayment is a good way to own a house while not putting your daily life at risk.
Underestimating homeownership cost
- Certainly, owning a home is an expensive thing. But don’t be deluded! The cost of owning a home is not limited to the total value.
- It certainly comes with several other costs, such as maintenance, repairs, water, gas, amenities, lighting and fixtures.
- Many times, first-time homeowners skip the expenses after buying a new home. This hits them unexpectedly and leaves them all messed up.
- To avoid being in such a situation, be realistic and include all the expenses beforehand.
These are the most common mistakes that many first-time homebuyers make. Indeed it’s true that you can get instant, bad credit short-term loans in Canada over your home loans, but you should do everything to keep expenses under control and within the budget.