Buying your new home is a big life decision which can be both exciting and challenging at the same time. As a first-time home buyer, you are flooded with a series of tasks and responsibilities which may leave you susceptible to rookie mistakes such as failing to compare home loans or ignoring other costs such as maintenance and house insurance. In fact, thousands of first-time home buyers who venture into the real-estate market each year commit a similar set of mistakes.
If you are planning to buy a house for the first time, ensure you steer clear of these common ones.
Not getting a mortgage pre-approval
Many home buyers go house-hunting without even finding out whether they can borrow enough money to get the property they might fall in love with. In a competitive market like the one in the UAE, a pre-approved mortgage will send out a message that you are serious about the property and will increase your chances of closing the deal in case you make an offer. And since you will have a price bracket in mind, you won’t waste time in neighborhoods you know are out of your reach. It’s always advisable to consult with a mortgage professional about getting an approval for a home loan before you start looking for properties.
Punching way above your weight
It’s natural to feel tempted when you come across an expensive house that ticks all the right boxes. You may even feel like stretching your budget or find that your lender is willing to approve a loan larger than you can afford. It’s very important not to fall for such temptations as you will only end up risking your financial future by overburdening yourself with a huge loan. Never punch above your weight when it comes to buying your house as it will only complicate your financial life.
Ignoring hidden costs
Most first-time buyers either miscalculate maintenance and other costs that are associated with owning a house or forget to account for them altogether. As an owner of a new property, you will have to pay for maintenance, home insurance, garden upkeep etc. Without budgeting these costs, you will find yourself financially overburdened after moving into your new house.
[Related: Buying a Home in the UAE? We’ll Help You Get Started]
Not comparing home loans in advance
Since most first-time buyers purchase properties with the help of a bank loan, they either consult their close friends and family members on mortgage options or get easily influenced by the first lender they approach. It’s important to carefully examine all mortgage options before taking a final decision, as a haphazard commitment can put you at financial risk.
Choosing an inefficient agent/broker
Assuming that most first-time buyers are naive, real estate agents often trick them into paying more than what the house is actually worth. Some inefficient agents may even advise you to buy a house that’s way beyond your budget. It’s important to be wary of such inefficient agents and brokers. Always carry out your own research and choose brokers based on client feedback.
Neglecting the locality
When it comes to buying a new house, the location can be as important as the house itself. Is your house near your workplace? How far are the schools, hospitals, departmental stores? Is the neighborhood too noisy? Is there adequate parking facility? Is the location close to major highways? Most buyers ignore these basic factors while making a decision and end up getting stuck at an inconvenient location.
Not carrying out background research
Most first-time home buyers opt for off-plan properties since they are cheaper and offer more benefits. However, a majority of them fail to carry out extensive research about the developer before entering into a contract with them. Since property is a major investment, you must always check the track record of the developer, the quality of past projects, completion date, client feedback, etc.