Purchasing your first home can be exciting, so it’s easy to get swept up in the process and make mistakes. Some mistakes could be harmless, but others could cost you money. It can be challenging to be aware of the proper steps without adequate research.
According to The Canadian Real Estate Association’s quarterly forecasts, the price growth in the Canadian housing market has continued to set records. The supply crisis has resulted in a competitive real estate market, pushing buyers to rush into a deal that doesn’t fit their budget, goals, or needs.
Settling for properties that aren’t for a first-time homebuyer can lead to buyer’s remorse. Being aware of the top mistakes first-time buyers make is the best way to avoid them during your purchase.
Setting an Unrealistic Budget
Being unaware of how much you can afford when purchasing a home can cause lead to complications. Be realistic about how much you can spend before starting your house hunt. You can use a mortgage interest calculator to determine what your monthly payments will look like.
A mortgage calculator will use your home’s price, down payment, mortgage rate, amortization period, and payment frequency to determine how much your new loan might cost you. A close estimate of your potential payments will make it easier for you to set a realistic budget for your investment.
Undermining the Value of Professionals
It might be cheaper to perform all your home purchase-related activities on your own, but this decision could cost you money in the long run. Many professionals work in the real estate industry to make this process simpler for you, such as real estate agents, mortgage brokers, and lawyers. Each individual is specially trained in their respective fields and can help you make the best of your purchase.
Industry professionals can also inform you about how you can save money on your first home. For example, Canada offers a first-time homebuyer incentive to help people purchase a home.
Not Making a Proper Plan
Purchasing a home is a significant investment, and it requires your full attention. It would help if you thought about how you will pay off the loan and determine the purpose of your purchase. For example, if you’re buying a home for your family, you need to consider the location, the home’s layout, and storage space. On the other hand, if your goal is to flip the house, you’ll need to focus more on the return you will receive on your investment.
Not Shopping Around for a Mortgage
Shopping around for a mortgage and getting quotes from multiple lenders will allow you to make an educated decision about your purchase. It may also encourage lenders to offer you a better rate because they will know you have several options.
You can also get a mortgage pre-approval before shopping for a home because it will help you set a budget for your purchase. Getting a pre-approval also increases your chances of finding a better home because sellers will perceive you as a more serious buyer.
Investing in your first home comes with mixed emotions, such as stress and happiness. You can avoid adding guilt to that mix of emotions by paying attention to common mistakes and avoiding them when shopping for a home!
