Home Buyers Common Mistakes to be Avoided
Buying a home for the first time in British Columbia is a big choice and will be one the biggest financial decisions you’ll ever make. However, despite this, buying a home is essential and will benefit you if you are a buyer who is moving out of rented property. Owning your own home gives you freedom and stability, and allows for other luxuries such as pets, which may have not been allowed if you were previously renting. Regardless of the benefits though, there are still a lot of speed bumps when buying a home for the first time and it is important to know the common mistakes individuals make, so you can plan ahead to avoid them. This article will lay out mistakes to be avoided so you have an easier time when purchasing your first house.
Know your Spending Limits
More often than not, first time home buyers will not count and prepare their budget correctly and are more likely to overestimate how much they can afford. Unfortunately, what the bank says you can afford and what you actually can afford are different things, and you should accurately measure your monthly/annual spending and subtract it from your “take-home” money, which should give you a rough estimate of what your home buying budget is. It should also be noted that this should be done before you go searching with a Kelowna Realtor as Kelowna first time home buyers home buyers tend to get attached to properties out of their budget, which can lead to a strained bank account.
Get Pre-Approved for a Mortgage
This is an essential step missed by many first time home buyers and may lead to you being unable to purchase a property altogether! Make sure you know exactly what the bank can give you and maintain a good credit score, as your dream home may be significantly more expensive than your available mortgage. Furthermore, even if your bank pre-approves you for a loan, it can fall through last minute if the bank notices any fluctuations in your credit score. In this case, you can lose thousands if you had made an offer and signed a contract.
On the note of mortgages, British Columbia offers a program for first-time buyers where they can reduce or eliminate the property transfer tax that is taken when purchasing a property. You can qualify for this through being a Canadian citizen who has lived in British Columbia for a considerable amount of time, and who has never owned a property or been given a property tax exception.
Just Choose Already!
One of the main issues with first-time buyers is that they are too picky with their first home, and often their dreams fall behind their reality. However, saying this, it is good to have some vision in what you want and do make sure you have a home “wish list” that you fill up. Just don’t spend any more time renting than you need too, especially if you have found an adequate home already. More often than not, you will probably have to do some renovations or purchase some new wall paper, but this is standard for many first time buyers. Continue paying rent until you have all the items on the list, and make the decision to become a homeowner now, rather than later.
Make Sure Additional Expenses are covered
When you rent a house you only pay the bills and you leave the mortgage, property insurance and tax to the landlord. When you own your own home, purchasers often forget about the additional expenses, such as tax, property insurance and repairs. In addition, if you are purchasing something like a Condo, you will have to pay mandatory maintenance bills, regardless if you require maintenance or not.
Conclusion Buying a home for the first time is an important act and one that has to be approached with caution. When buying a home for the first time in British Columbia, make sure you avoid these mistakes. Remember to formulate an accurate budget and make sure you have been pre-approved for a mortgage before making any offers. In addition, don’t be picky about your first home, renovations can always be made and renovations are often cheaper than buying higher value properties. Finally, make sure you understand the additional expenses of owning a home, such as tax, insurance and repairs.