The 9 most common first time buyers’ mistakes
Buying your first home is an exciting and stressful time - with the backing of a mortgage lender you are on the road to owning your first home. However they’re a lot of things to be aware of when setting off, so here’s a check list of 10 first time buyers’ most common mistakes.
Dipping into their savings
Banks will want to see that you can save for a deposit, over and above your rent and will require evidence of such. It might be tempting to dip into your savings for a holiday or car, even if it’s only temporarily, don’t. Banks will want to see at least six months of uninterrupted savings proving that you can cover the repayments completely on your own.
It may be only an occasional flutter on the horses or a Premier League accumulator, but banks will take a dim view of online gambling habits. If they see four or five transactions with an online gambling site, they are unlikely to approve your mortgage. If you’re serious about saving for a house, cut out the bets.
Loyalty to their bank
People think that if they’ve been with the same bank since they were students that the bank will favour them, but in reality, their bank will not treat them any differently than if they simply walked off the street. The proof that you can present of your ability to make repayments is all that matters.
Getting into a bidding war
The worst thing you can do is to get into a bidding war with other buyers. You may really want the property, but the only person who wins in a bidding war is the seller of the property. Simply set your limit, judge what is the true, objective worth of the property and don’t deviate from that. You should asses the value of what you are buying, you demand value in everything you buy, so it should be the same for the biggest purchase of your life.
Not spreading costs
Some first time buyers see a 30 or 35 year mortgage as a life sentence and may be keener to reduce the term. However, you can change the terms of your mortgage at any time, the important thing is to get in the door and to ensure that you can easily make mortgage repayments even when rates inevitably go up or your circumstances change.
Stretching too far
Don’t stretch your finances to get your ‘dream’ home. A first home should be well within your budget and more often than not it will be a modest abode. Your first home will get you on the property ladder allowing you to trade up later when it’s time for you to move on.
Skipping the survey
You might fall instantly in love with a house and want it at all costs, but it can’t be overstated the importance of getting a qualified, independent structural surveyor in to assess the property. We’ve all heard of pyrite horror stories or tales of rising damp or flooding, don’t be one of those.
Fools rush in
Don’t make your first bid at or above the asking price, no matter how much you want the property, all you’ll do is drive the price up. Make a reasonable off below the asking price and at the early stages of a private treaty stage it is subject to a survey and far from binding. You can back out later if anything nasty turns up, even after putting down a deposit.
Thinking of buying your first home in Ireland?
Don't forget to check out the EBS First Time Buyers Guide.
You can also use our mortgage calculator to find out how much you may be able to borrow.
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