Planning to buy that new home you’ve always dreamt of?
Well, the home-buying process can be daunting, especially for first-time buyers. Between the legalities and the entire home-buying process, you can easily make mistakes the first time.
So, here are the top six most common mistakes first-time home-buyers usually make and must avoid. Without any more ado, let’s get started.
Not having a fixed budget
One of the most common mistakes first-time home buyers make is not having a planned budget in place. If you aren’t sure about your affordability factor before making a huge buying decision, you’ll be leading yourself to financial troubles. The pro plan is to weigh in all the major expenses or loans and make a budget, particularly for your home purchase.
Not familiar with one’s loan eligibility
Buying homes with housing finance is one of the most common decisions home buyers make. That’s why you should be completely aware of your home loan eligibility to find yourself the best deals. Analyse your creditworthiness, savings and budget and make a buying decision accordingly.
Not analysing home loans
You will be spending a significant amount from your life savings while purchasing your home. Therefore, while you choose your home loan, make sure to compare different home loans. When choosing a lender, make sure to select the one offering the most convenient interest rate.
Not applying for mortgage insurance
If you don’t have mortgage insurance, be prepared to face potential debt and credit losses. With mortgage insurance, you are eligible for financial flexibility and equity for your debt payments. Purchasing a home is one of the most expensive investments to make, which is why having mortgage insurance would be the best decision.
Not aware of tax benefits
Not everyone is in the know about the taxation process when buying a home. Before purchasing a home, you should be aware of the rebates available under the Income Tax Act. If you proceed with buying your home without paying off your taxes, it might lead to tax evasion. Additionally, if you can’t claim your rebate, it can result in financial losses.
Not keeping records of important documents
While you make your new home purchase, it is essential to ensure that all your important documents are in place. And one such document is your Will. As you purchase your new home, you can add that new asset to your Will.
Doing so will protect your house and the rightful beneficiary mentioned in the Will will receive your home after you pass away.
Most first-time home buyers don’t know about maintaining a home, planning a mortgage, and doing home repairs in the right time or what will happen to the house after the Owner’s death.
There is a legal procedure to get the property transferred in the name of the legal heirs. If there is Will, the transfer process becomes straightforward. In the absence of Will, the property is distributed based on the applicable succession laws. Legal heirs will also need to submit no-objection certificates depending on the settlement over the property. Your family needs to do the Paperwork at the Sub-Registrar office for Registration of Transfer of Property Ownership.
After registration, beneficiaries must also apply for mutation of the title at the local municipality office.
If the property has an ongoing home loan, the beneficiary will need to repay the entire loan. Only then they can get the property transferred in their names.
That is why it is important to create a Will document to look after your Assets in your absence.
Buying a home is a decision, both exciting and challenging at the same time. Involving a long process, home buying is one of the biggest financial decisions you need to make in your life. Fortunately, with these common mistakes in one place, you can learn from others’ mistakes before you buy that dream home of yours.
So, all set for the next step? Make sure to research well and be prepared before buying your home.