First time home buyers are prone to making mistakes, though they are literally costly. Here are the most common mistakes Fort McMurray home buyers make as well as advice on how to avoid making them yourself.
Buying Too Much House
There are several ways you could end up buying “too much” house. One is spending more than you can comfortably afford on the house. Another is buying a house that’s really larger than you need, so now you’re wasting money on space you don’t really use. Yet another variation is buying a house in a higher class neighborhood out of the mistaken belief that owning the house in the “right” neighborhood is correlated to success. In reality, spending a significant chunk more each month on interest, taxes and associated expenses to “keep up with the Joneses” will keep you poor, not lead to a higher net worth.
One solution is buying a house with the space you need now and in the immediate future, such as when you have one child but are planning on a second. Don’t buy something with two extra bedrooms, rationalizing it as a possible play room or guest room. And buy something well under the maximum amount you’re allowed to borrow. In the best case scenario, you’re now able to pay off the house faster while saving for the future. Worst case scenario, the home needs more maintenance and has higher ongoing costs that you’re now able to cover without financial strain.
In order to avoid problems, understand all of the associated costs that come with the home on top of the mortgage payment. Will you need to pay condo fees, association dues and/or property taxes? What are the utility bills like? Only close on a home if you can afford both the mortgage and all of the associated costs with the property.
Not Shopping around for a Mortgage
Too many home buyers choose to go with their current bank, assuming that it will offer them the lowest interest rate and reduced fees. However, this isn’t the case. Different lenders have different standards for determining who is a high credit risk and thus charged higher interest rates. Closing costs vary as do loan terms like prepayment penalties. Consult with a Fort McMurray mortgage broker to find the best loan for you, both in terms of loan terms and associated costs.
“I Love What I See, Let’s Buy It!”
It is a major mistake to fall in love with a home based on the pictures you see online or the way it looks when you pull up to the front door. A decision that you must have this house leads you to overlook needed repairs, poorly laid out floor plans and/or a bad neighborhood.
You can reduce the odds of making this mistake by remaining emotionally detached as you review each home. You also need to reserve judgement until after a qualified, neutral third party inspector has reviewed the home. Be willing to walk away if the property requires more work than you’re willing to do.