Let’s take a look at the three top mistakes that new home buyers make and help you to avoid them when you purchase a property of your own.
Mistake #1 – Not getting bond approval
First-time home buyers are always excited when a seller approves their offer, but this can soon turn to disappointment when the bank rejects their bond application.
To make sure that your home buying story has a happy ending, you’ll need to ensure in advance, that you qualify for a big enough bond – it should be the same or bigger than the offer you’re making on the house you want to buy.
- When it comes to finding out what size bond you’re able to get, your bank is a good place to start
- If you’ve been a bank customer for a few years and your income and credit history are looking good, you should qualify
Even if you’re rejected, there are always other home loan companies that can help, so don’t give up. Rather know your ceiling ahead of time and be prepared instead of dejected after a rejection.
Mistake #2 – Going too big too soon
We all have our own images of the perfect home in our minds, and this could be why many young property buyers get carried away when they’re choosing a property.
- When you choose your home, ask yourself how many rooms you really need – and do you really need a plunge pool and outdoor entertainment area when you can open the doors?
- You’ll be better off with a smaller house or townhouse with an affordable monthly bond payment and extra money at the end of each month.
You can always put this surplus toward renovations or other improvements and turn your house into your dream home over a few years.
Mistake #3 – Only thinking about the house – and not the area it’s in
Have you ever seen a great-looking house on a property website and become uber excited by it, only to find out that it’s two hours’ drive from where you work?
Location, location location… Before you consider buying a house, you need to look at the area carefully. Here are some things to consider.
- Distance from work – unless you enjoy spending your life in traffic, you’ll want to choose an area that’s not too far from the office
- Crime and safety – while no area is perfectly safe, an area that’s known for its high crime rate is probably a bad idea, no matter how great the house looks
- Schools, shops, and entertainment – these should be within a short driving distance to save time and free up your schedule for some “me” time…
Choosing a house in the ideal area that suits your needs – and improving it year by year – is one of the best strategies that any first time home buyer can follow. It’s also a great way to ensure that when the time comes to sell your home, you achieve a better resale value.
Mistake #4 – Not having insurance for your home
Home insurance is essential for every South African, yet there are some first-time homeowners who choose to take the huge risk of being uninsured. The ease of applying for a home insurance policy and the peace of mind that it provides are well worth the monthly premium. If you do need to claim one day, you’ll be glad you took the right decision and insured your home.
By avoiding the mistakes we’ve covered in this article and ensuring that you are well covered with the right homeowners insurance, you’ll be well on your way to making a great property investment.