Bad Habits That Can Sabotage Your Home Buying Plans

Should You Use the Home Buyers Plan? - RATESDOTCA

Some habits are hard to break, and some habits will break your hopes of ever owning a home if you can’t change them. Buying a home requires careful planning and research to ensure everything goes smoothly, and that you don’t end up over-spending on a house you’re not entirely happy with. So, before you get started, take a look at the following six bad habits that can sabotage your home buying plans if you don’t change them soon!

Being Bad at Saving

Most of us can’t afford to buy a home outright, and so we’ll need to take out a mortgage. In order to do that, you’ll need to put down a lump sum of cash as a down payment, typically between 5% and 20% of the total value of the home you wish to buy. But the costs don’t end there, you need to also think about the hidden costs of buying a home.

The house buying journey is a long one, and it’s important to start saving up as soon as possible in order to be able to afford it in a reasonable timeframe. If you’re used to living paycheck to paycheck and never putting any cash aside, you’ll struggle to ever get your foot on the property ladder. It’s important to break this habit, and start putting cash aside each and every month. Which leads us to our next point…

Being Bad at Spending

Just as bad as being a poor saver is spending what money you do have wantonly. Taking advantage of credit cards and pushing them to their limit is a bad way to go about buying a home. If you’re spending beyond your means each month, your credit score will reflect this, and most lenders will turn down your application for a loan until it looks a little healthier.

It’s important to break this habit, and start regulating your finances, perhaps try following the 50-30-20 rule by dividing your monthly income into needs, wants, and savings/debt repayments. This allows you to get a tighter grip on your financial situation in good time, improve your credit score, and put cash aside for a down payment.

Failing to Do Thorough Research

Life in the 21st century is fast paced and most of us are busy with work, love life, miscellaneous. As such, it can be tempting to forgo researching what you’re not entirely familiar with, and trust that things will work out with just a basic understanding. However, buying a home is a complex process, with many opportunities for financial disaster if you’re not careful.

Break that habit and take the time to really get to grips with the process and the potential downfalls. The more you know, the more you’re in control of the situation. Even if you hire an agent to help you throughout the process, it’s good to have a handle on the situation to avoid scams, needless spending, and wasting time.

Not Shopping Around

Some people always seek out the best bargains, and will shamelessly haggle to get the best price they can. Most of us aren’t so bold, but this boldness can be a useful trait when buying a home. Even if you feel guilty for wasting people’s time, rather than just going with the first option you come across, it’s important to put those feelings aside.

This can apply to hiring the right estate agent or lawyer, but more importantly shopping around for the best mortgage. Not all lenders offer the same terms and options, and while it might be easier just to go with your bank, you’re almost certainly missing out on a far better deal. With a 30-year mortgage, missing out on those better rates or more flexible options can truly cost you thousands of dollars that could be better spent.

Failing to Commit

Living a nomadic life is great for those who are wired that way. It offers freedom, opportunity, and excitement. However, if you struggle to be able to commit to a specific job or location, think again about buying a home. Most lenders require you to prove you’ve worked for one company for at least two years before they’ll consider your application.

Never Asking for Help

Some of us are pretty stubborn and take pride in being able to take care of most things ourselves. But not asking for help when buying a home puts you at a massive disadvantage. The world of real estate is constantly changing, and the only people who truly have a grip on it are those that work in the industry full-time. Don’t be afraid to ask for help from a professional real estate agent, and in doing so, you’ll probably find a home that better suits your needs and budget.

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