Buying your first home is a big deal. After all, it’s a major milestone, and probably the largest purchase of your life. So, of course, you want to get it right.
But, let’s face it, navigating the housing market is hardly a walk in the park. Pushy estate agents, stern mortgage lenders, chains and the spectre of last-minute gazumping can make it a stressful experience. Even more so if you’re new been through the process before.
The last thing you want to do is make a rookie mistake like accidentally purchasing a property with a short lease that you then struggle to sell later on.
Here are five common pitfalls to avoid when buying your first home.
1. Having a poor credit rating
Mortgage lenders use your credit report to determine your level of reliability to make repayments. A bad rating may prevent you from getting a mortgage.
But the good news is there are few things you can do to ensure you have a good rating. These include:
- Register to vote
- Pay all your bills on time
- Use your credit card but manage your spending carefully
- Don’t apply for credit before a mortgage
- Avoid straying into your overdraft
2. You don’t know how much you can afford
Know your numbers before you start housing hunting. There’s no point arranging viewings for properties you can’t afford. Or worse─purchasing a place and finding out only later that you can’t afford the bills as you’ve overstretched yourself financially.
Things to consider when working out your budget:
- How much you can afford to put down as a deposit. The standard amount is 10-15% of the property value.
- How much lenders will let you borrow? Usually, it’s around 4.5 times your annual income.
Don’t forget to add extra costs into your final calculation. These will include valuation, surveyors, legal and the estate agent fees. Also, set money outside to furnish your new home with and cover any immediate maintenance and repairs costs.
3. Not know what you want
Make a list of ‘must-haves’, ‘would be nice to haves’, and ‘no, no’s’. This will help you focus your search on properties that are suitable. Rather than wasting time and energy looking at places that don’t meet your budget or lifestyle needs.
4. Rushing the process
It’s essential you take your time. Impulsive decisions are a bad idea. There are lots of factors to consider when buying a property, which means it’s easy to miss important things. Don’t let the ‘fear of potentially missing out’ trick you into making a decision that you will only regret later on.
If you do really like a property, here a few things you should do before putting in an offer:
- Visit the property at least twice.
- Take photos so you don’t forget what it looks like when you get home.
- Visit the property at different times like in the morning, evening, once during the week and another time during the weekend.
- Drive around the neighbourhood at different times of day on your own.
- Test your work commute to gauge the true time it might take during your rush hour.
- Knock on your neighbour’s doors and ask them why they love living in the area.
5. Not checking for red flags
One of the most important things is to check if the building is sound. Things like subsistence, damp or plumbing issues could end up costing you a fortune. Don’t depend on the surveyor’ report solely either. Make sure you inspect the property carefully yourself. Don’t hesitate to bring in a professional to get an expert opinion.
Some key red flags to look for:
- Is the property in a flood zone? Has it ever flooded in the past? Buying properties in a high-risk flood zone will significantly increase your building insurance and make it hard to sell.
- Check the roof (including insulation and tiling).
- Plumbing, the boiler, water pressure and drains.
Need help selling a property with a short lease?
A short lease usually has 80 years or less remaining on it before it runs out. Extending a lease is costly (like £10,000 or more) and time-consuming. No wonder it puts buyers off.
If you’re struggling to sell a property with a short lease, consider using a company like House Buy Fast. They have lots of experience buying flats with short leases for cash. This means the seller doesn’t need to worry about organising a lease extension themselves.