Getting on the property ladder is one of the most daunting, yet ultimately rewarding experiences of your life. Unfortunately, buying a house isn’t simply like buying some groceries from the local supermarket. Nor is it as straightforward as buying a new car. In fact, it is probably one of the biggest hassles you could think of, especially when you aren’t entirely sure what to expect, or what you should be doing in the first place. To help make your first-time home purchase as simple as possible, here are several first-time home-buying mistakes to avoid.
Failing to do your research
As mentioned, buying a new home isn’t like making a regular purchase. There are phone calls to be made, emails to be sent, solicitors to contact, and plenty more besides. It would be great of you could just check on the internet, see a house you like, pay for it, and move in the next day but of course it doesn’t work like that. There are mortgages to consider, travel links, the area itself, how much to offer, and much more besides. Read up online and try to find out as much as possible about buying a home, getting a mortgage, what to expect, and so on.
Not understanding how mortgages work
Technically this could have been covered previously when we told you to do your research, but we feel that it’s so important that we’ll include it here. When it comes to buying a house, you will almost certainly need to get a mortgage. Getting a mortgage however, isn’t as simple or as straightforward as it once was. You need to prove to the lenders that you are sensible with money, that you can afford to pay back what you have borrowed, plus interest, and that you can stick to the monthly repayments. If you can’t do this, your chances of being approved for a mortgage are virtually zero.
Thinking that no credit history is beneficial
When it comes to getting a mortgage, one of the first things that the lenders will check is your credit history. Now, some people seem to think that having no credit history, I.E no credit cards, no loans, or no cars on finance, is a good thing, but in fact having no credit history is just as bad as having a poor credit score. The lenders want to know that you can manage your money and can afford to pay your debts, and a credit score helps indicate whether you fit this criteria. Before applying for a mortgage, you will need to ensure that you have a good credit score, or at least some credit history.
Thinking that you need a 10% deposit
One of the reasons why so many youngsters are struggling to get onto the property ladder is because of the deposit required. Many believe that it is 10%, as this generally the guideline to aim for. That means that a property on sale for €100,000 would need a €10,000 deposit, which is a heck of a lot of money to save up. The reality however, is that you can get away with a 5% deposit. Obviously the bigger the deposit you can put down the better the mortgages deals will be, but the thing to know is that you can get away with a 5% deposit.