If you are taking your first steps on the property market as a first-time homebuyer, you already know it is a bit of a challenging ordeal. And while it is true that venturing on the property market can be daunting with all of the pitfalls that await, there is some hope in the end. All it takes is some research on the most common mistakes that you can make so that you can avoid them:
1. You underestimate the time it takes to secure a mortgage
Getting a mortgage is not as straightforward of a process that many believe. However, there is no definitive timeframe for approval, and that is something you have to consider. Expect somewhere between 18 and 40 days between submission and approval, though bear in mind that in some cases it can take longer. Starting the mortgage application process as early as possible is very important.
2. You don’t get an agreement in principle
Getting an agreement in principle from a lender is a necessary step in the home buying process. Essentially, this is a certificate from the lender that states the amount they are likely going to lend you. It may not be a 100% accurate offer, though it still gives you a good idea of how much you have to spare.
3. You underestimate the cost of the home
The property itself indeed makes for the biggest expense. However, know that there are even more costs to it. Legal fees, getting a survey report and conveyancing costs are all things to consider. Additionally, don’t forget about the household bills and the cost of repairs you need to conduct. Building insurance and council tax only add up further, and if you disregard them, you will find yourself overwhelmed. Do a simple calculation of how much you will need for this property and beware not to get caught financially.
4. You use the wrong solicitor
Most mortgage lenders work with a panel of solicitors they are ready to instruct immediately. If you decide to enlist a solicitor who is not on the same panel, chances are you will end up paying again for an approved solicitor. Always make sure to check the list of approved solicitors of your lender and hire one of them.
5. You barely understand the terms ‘freehold’ and ‘leasehold’
Depending on what property you buy, there may be some limits as to what you can do with it, not to mention there may be extra fees. A leasehold means you will only be able to live there for a set amount of years, though you don’t own the land of the property itself. To make any alterations, you have to get permission from the freeholder. A freehold property puts you in the role of a sole owner – of the building and land, it is on. In this case, there are no service charges, though you will have other costs for maintaining the building. Knowing the difference between these two is important.
6. You don’t do any research into the area
Looking into the area before you have even registered with an estate agent is very important. Set your priorities straight. Do you require good transport links, schools, green spaces, or other local amenities? If possible, spend some time in the areas that have properties for sale, to get a good feel of the place.
Avoiding these mistakes is essential for ending up with a property that best serves your needs and requirements.