10 common mistakes to avoid when buying your first home
Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
When you’re talking about life’s major milestones, buying your first home is right up there. You’ll become addicited to property sites, Pinterest will become your new best friend and your weekends will be booked up with viewings.
However, buying a property is a complex process. From applying for a mortgage to sorting out removals, there are a number of hoops to jump through before you can get settled in your new home.
To help you avoid any pitfalls along the way, we’ve put together a list of common mistakes first-time buyers make and how to overcome them.
1. Check out your credit score rating
Your credit score is used by lenders to determine whether you qualify for things like credit cards, loans and of course mortgages.
If it doesn't look too healthy, you may fall at the first hurdle. Identify the problem and you can make plans to improve it.
2. Have your finance in place
Get your ‘Approval in Principle’ in place before you begin to view properties (also called a 'decision in principle', 'mortgage in principle' or an 'agreement in principle'). That way, you’ll know your highest possible offer and you’ll be able to act quickly and show you’re a serious buyer when you need to.
3. Play it cool
When you step through the doors of that latest property viewing it may be love at first sight, but keep that to yourself! If the seller’s estate agent sees that you’re smitten they may attempt to push up any offer you make or play you off against other bidders.
Keep a level head and try not to get too attached.
4. Look out for serious problems
However much you adore that stone cottage, if it’s riddled with damp and has subsidence problems, you can’t look the other way. Some problems can be incredibly expensive to fix and could take the joy out of your new home, no matter how much you love the garden, balcony or free-standing bathtub.
5. Explore the local area
The perfect property is only perfect if it’s in the right location. Be sure to do your research first and check out transport links, local schools and shopping facilities before putting in an offer. You might also want to stake out local pubs, bars and restaurants if a good night life is high on your agenda.
6. Valuation vs survey
There are so many different terms bandied around when you’re purchasing a property and it can all get very confusing. One big thing you should be aware of is the difference between a valuation and a survey.
A lender valuation is carried out to make sure that the property you want to buy is worth the money you’re borrowing. It’s not a comprehensive survey and it won’t flag up major issues like damp or dangerous electrics.
A house survey on the other hand will give you more information on the condition of the building. There are varying types of surveys to choose from (with varying costs) and it all depends on how much detail you need.
7. Be flexible
Don't fixate on a particular type of property or a detailed list of must-haves. You’ll only become frustrated when you can’t find the property that ticks all of your boxes. Try to keep an open mind and you’ll soon discover a number of properties that could be perfect for you.
8. Know the difference between leasehold and freehold
Freehold properties are those you can buy and own, along with the ground they stand on. Leasehold properties are those where you own the home but not the ground, which must be leased from the freeholder. Before buying a property it’s vital to know which of these categories it falls under.
9. Understand the full costs of buying a home...
From solicitors’ costs to stamp duty, there are a lot of expenses associated with buying a property. First timers must budget for them all. For a full breakdown, take a look at our fees checklist for first time buyers.
10. ...And the costs of owning a home
In the run-up to buying a home it’s easy to forget that once it’s yours you’ll be responsible for every part of it. When the drains are blocked or the boiler breaks down, the repair bills will have your name on them. Setting aside a little money each month is a good idea for anyone who owns a property.
The path to home ownership isn’t always plain sailing but it’s most definitely worth it. Be aware of these common mistakes and you’ll be more clued up and better prepared to get your first mortgage.
You may also want to take a look at our First Time Buyers Guide. It goes through some of the key steps you should take to find your first home, find the money to pay for it, get through all the paperwork and protect you and your new home for the future.
This guide is intended as a summary only and does not constitute financial advice given by Leeds Building Society. No reliance should be placed on this guide. We recommend that you seek independent financial advice if you have any questions or queries.