Buying a house involves more than just searching for the right house and the right home loan. There are many other aspects involved which a lot of home buyers tend to forget. Here are the Top 10 things home buyers forget to do.
1. They forget to budget
Home ownership expenses are a lot different from those of a tenant. As well as the expected mortgage repayments and monthly utility bills, you will also need to budget in repairs and maintenance costs, moving expenses, home insurance, and more. So it’s important to set up a budget before you delve into home ownership.
2. They don’t get a loan pre-approval
A loan pre-approval is a document stating how much you can expect to be able to borrow from a lender. This can help you set a realistic budget when looking for a house. Private sellers, auctioneers and real estate agents are also more likely to consider you as a serious buyer, meaning you can be confident when negotiating.
3. They forget to check up on their credit score
Many homebuyers tend to overlook their credit score when applying for a home loan. Essentially, your credit report will reveal your record with previous debts, including your active and previously inactive bank accounts, loan enquiries, and other financial factors. Your credit score will have an effect to how much you can borrow from a lender. It can be helpful in your loan application to check how healthy your credit report is. If it's not good, there’s still a chance to improve it by repaying your loans on time.
4. They don’t factor in other home buying expenses
Buying a house results in many expenses. Apart from the home loan repayments, you need to factor in your deposit, Lender’s Mortgage Insurance (LMI) if you borrow more than 80% of the house’s value, conveyancing fees, inspection fees, and a whole lot more. So don’t forget to factor in ongoing and upfront expenses when buying a new home.
5. They don’t think about the home’s resale value
When looking for a house, you shouldn’t just look with a buyer’s perspective but you should also look with a seller’s perspective because very few people stay long enough in their homes to completely pay off their mortgage. It’s best to consider the selling potential of a home so it will be easier to sell the house if you need to.
6. They don’t get a pest and building inspection report
A pest and building inspection is another thing that some homebuyers forget. This is vital when you are home shopping so you can see if there’s anything wrong with the house. If there is, you can cancel your offer and look for another house that has no issues.
7. They don’t apply for home and contents insurance
Some lenders require you to have home and contents insurance since they are also investing in your home. This is an important aspect of homeownership you shouldn’t forget. This will protect and cover your home and the contents inside it. Make sure that you get your home and contents adequately covered.
8. They forget to take advantage of the First Home Owner Grant
If you’re a first time home buyer you may be able to take advantage of stamp duty discounts and the First Home Owner Grant (FHOG). The amount of First Home Owner Grant (FHOG) you can get will depend on the value of your home and the state/territory you’re buying in, so it’s best to visit your local government’s website to see if you qualify and how much FHOG you can get.
9. They forget to research the neighbourhood
Even if you have found the perfect home because of its features, number of rooms, kitchen, etc, the location and the neighbourhood will still be important factors. It should fit your criteria, including proximity to work, to a good school, to shops, public transportation, and more.
10. They don’t know about their easements and boundaries
Another thing that some homebuyers skip is finding out information about easements and boundaries. You may not know that you are actually not allowed to park or to build a fence in a certain area of your land, so it pays to know what your limitations are to avoid problems.
Buying a house can be an overwhelming process, especially if it’s your first time. Make sure to consult with home loan experts so you can be guided through the home buying process.