Buying a home for the first time is a daunting process, and you can easily make a mistake if you aren't careful. Here are a few measures you can take to avoid home buying regrets:
Build an Emergency Fund
One of the saddest things in life is buying a home and having it foreclosed because you can't afford the payments. What is more, you can't predict the future, which means even if you have money now; you might not have it in the future. The best way to guard against the risk of foreclosure is to build an emergency fund that you can dip into when your regular financial taps dry up. The emergency fund should be able to, among other things, cover several months or mortgage payments.
Explore Different Loan Options
Buying a home is an expensive venture, and the biggest part of the expense is the actual purchase price, of which the mortgage is a big part. Therefore, trimming the mortgage is a good way of reducing your home ownership cost. The best way to do this is to shop for a low mortgage rate and explore different loan options. Alternatives to traditional mortgage include borrowing from individuals, getting a balloon mortgage or even taking government home loans (if you can qualify for them). Your main quest should be to buy a home with the cheapest loan possible.
Use the Home Inspection Report
Many homebuyers don't put their property buying inspection reports to good use. The report is not just a tool for showing you defective parts of the house, you can use it to:
- Negotiate a lower price
- Get the seller to make some repairs
- Get the seller to throw in some incentives (such as shared closing costs)
- Project home maintenance costs if you end up buying the home
- Back out of the sale if the report is filled with major defects
Get Multiple Opinions
Lastly, it's a good idea to get multiple opinions from other people before signing the purchase contract. As a first time home buyer, it is easy to be fixated on one thing at the expense of other critical factors and make a mistake with the purchase. For example, you can be so fixated on getting a spacious three-bedroomed house with a pool that you might ignore its rundown nature. A second or third opinion will force you to consider everything.
In addition to the above tips, you should also use a realtor to hold your hand through the process and ensure everything is professionally handled.