For most people, buying a home is the single largest expense during their lifetime. It should therefore come as no surprise that it’s littered with opportunities to make mistakes – particularly if you’re new to it.
If you’ve made any of the common first-time buyer mistakes we’re about to reveal, you shouldn’t feel bad. You’re not alone, and the buying process is far harder than it’s often given credit for.
So, with that in mind, here are the most common first-time buyer mistakes we see – and how to avoid them.
Mistake 1: A lack of credit history
If you don’t currently have any credit history and want to buy a house, you’ll need some. It’ll give you a far better chance of being accepted for a good mortgage deal and stand you in good stead for the future.
The easiest way to do this is to sign up for a credit card and set it up with a full payment direct debit. This means you won’t miss a payment and that will reflect positively on your credit score.
You can even boost your credit worthiness by signing up to services like Netflix; those automated monthly payments will give your bank some credit to assess against you.
There’s no such thing as a universal credit score. It’s important to bear this in mind when checking yours; if Experian says you have poor credit, that doesn’t necessarily mean you’ll be unable to get a mortgage.
Lenders use their own methods to assess credit worthiness, and this website will reveal what you look like on the three key references used by most banks and building societies. (They offer a 30 days free trial, too – just don’t forget to cancel it.)
Mistake 2: Incorrectly registered bank statements
If your bank statements, mobile phone bills, and other utilities aren’t registered in your name and current address, you’ll encounter all sorts of trouble during a mortgage application.
It’s not uncommon for people to have these examples of life’s necessities registered in parents’ names or at previous rental properties.
Now is the time to change everything to your name and current address if you’re looking to buy your first property.
Make sure you’re on the voter’s electoral roll and registered at your current address, too, as this is important to show you are who you say you are.
Mistake 3: Viewing properties too quickly
Sure, you’ve just seen your dream home and you think it’s within reach. But are you sure you can get the mortgage needed?
Viewing properties before checking mortgage eligibility is the fastest way to have your hopes dashed when it turns out you can’t actually afford the one you want.
Make sure you start by speaking to a mortgage advisor and, if possible, get an agreement in principle (AIP). This will also ensure you can confidently make offers and gain the trust of estate agents and vendors.
Mistake 4: Not saving enough
If you look hard enough, you can still find 5% and 10% mortgages, but 15% and above are more common requests from lenders these days.
That means you need a fair amount of money upfront before you can realistically make an offer on a property. But it isn’t just the deposit you’ll need to stump up.
Legal fees, insurances, and the costs associated with physically moving will require some upfront cash. It’s hard work and might mean you have to put the purchase off for a while but saving for the move in advance will put you in a far stronger position.
Mistake 5: Not undertaking research before making an offer
How sure can you be that the property you’ve fallen in love with does what it says on the tin?
How long has it been on the market? Have you seen any comparables from the estate agent to assess the fairness of its value?
Always undertake plenty of research before you make an offer on a house. These days, this is easier than ever thanks to websites which will show you what else has sold in the area, and the history of prices.
You’ll need to make more than one viewing, too, if you want to identify any elements of the home that will need improving (for instance, the boiler and any structural work).
Bonus tip: work on your story
Before you put in an offer for your new home, work on your story. Why are you offering that price in particular? What makes you an attractive buyer? What assurances can you offer the vendor?
Your story as a first-time buyer could be the element that clinches the sale – just remember to avoid the common mistakes we’ve listed above, first!
If you need help buying your first home or have any questions about the mistakes we’ve mentioned today, just get in touch with the Gough team.