common mistake first time home buyers should avoid

Common Mistakes All First-Time Home Buyers Should Avoid

By: Guyub
15th Dec 2021
Buy & Sell

Buying your first home is a HUGE milestone. However, as exciting as this moment may be, it is important that you be extra cautious too. A mistake made can potentially lead to years of frustration and pain… and in most cases, it all could have been avoided from the start!

Below we have listed the top few common home buying mistakes that you SHOULD avoid.

1. Not eligible for loans before starting your home search

Making sure you are eligible for loans lets you know if you qualify for a loan and how much you can borrow from the bank, which will help you narrow down the price range of homes you can afford.

Beside being mere eligible for loan you will need to find out how much is the loan that you qualify for and the margin of loan the bank willing to approve.
Before starting your for your dream home, you can make your own assessment or you can contact any bank loan officer to seek for advise and they can assist you to make an assessment to determine what is the amount of loan you are eligible.

Having a good finance management, healthy credit score and Debt Service Ratio will ensure your eligibility.

Avoid big credit purchases or other things that might potentially ruin your chances of getting that home loan.

2. Not figuring out your finances and what you can afford

Remember – your monthly instalment repayments should not equal the amount of your gross salary! More often than not, buyers end up spending way beyond their means because they did not take into consideration their overall expenses and debts.

Plus, you will have to fork out more for the heavy upfront costs and other expenses that come with homeownership, so it is always good to be prepared.

To prevent this, know your budget (and stick to it!). You should have little debt and enough disposable income to pay off your loans, invest and put aside for emergencies. Ideally, your home payments should not exceed 30% of your total income.

3. Not shopping around for home loans

It is not wise to settle for the first home loan you find. As overwhelming as this process may be, it is in your best interest to compare at least 3 home loan quotes so that you get yourself the best deal that will save you the most money in the long run.

Don’t let anyone rush you through this process. Crucial things you should take into consideration include:

    • Bank;s lending rate
    • Closing costs
    • Down payment
    • Mortgage insurance
    • Potential prepayment

4. Deciding on a home based on price ONLY

With the sky-high property prices in Malaysia, it may be tempting to settle for a home because of the cheap market price or attractive deals and rebates on offer. However, that should not be the sole factor to base your decision on.

Price is definitely an important factor, but you should also take into account other factors such as:

    • Size & house type, according to your needs & preference
    • Distance to your workplace
    • Amenities for your daily needs & entertainment
    • Connectivity via highways & network of roads
    • Proximity to public transport (especially if you don’t own a car)
    • Developer’s reputation
    • Neighbourhood & overall security
    • Condition of the home (sub-sale property)

Explore more here on Guyub! Over here, you will not only find a wide selection of homes for sale at your desired price, but also useful neighbourhood insights such as available amenities close by and property experts who will help you find the right home for your needs.

5. Not willing to compromise on location

Having a home in a central location is definitely what most of us long for. However, homes in prime locations are not always cheap.

You should take into consideration what is important to you, like your commute time, distance to amenities and the level of convenience you desire and then make a decision from there. Oftentimes, despite the distance, the home might be a better deal for you with all the amenities and public transports like MRT being available close to the home, at a cheaper price.

6. Not bothering to check for damages & defects in the home

This is crucial. A thorough inspection of the sub-sale home should be done to check the condition of the home. On top of that, the extent of repairs (if any) for damages and defects will also need to be addressed should you decide to buy the home. And all these, if possible, should be done by a proper contractor or consultant.

The last thing you want to do is to be burdened with extensive repair or renovation costs that you cannot afford. Plus, you can also use this knowledge as you negotiate with the seller to fix the problem or lower their sale price.

And even if it is a brand new home, spotting out defects after receiving the keys to the home is crucial – you will need to report them within the 2-year defect liability period for the developer to fix them for free.

You will have to expect to fork our extra for renovation or repair especially for houses that are more than 10 years old. Old leaking pipes to replace, faulty electrical wiring, worn off roof tiles, worn off roof trusses, broken tiles and other issues.

7. …Or letting a small flaw stop you from considering the home at all

On the other hand, letting that home go because of a fixable physical imperfection is shortsighted.

If the home ticks off the major, unchangeable things you want in a home like the price, location and size, buying the home might actually be worth it in the long run.

8. Letting your emotions rule over logic

Perhaps you are desperate to move out of your current home. Or maybe you fell in love with this particular home and cannot imagine living anywhere else.

Rarely are great decisions made in such a heightened emotional state of mind. Step back and think – is this home really the right one for you? Consider all the information and facts you have regarding the property, as well as your needs, and take some time to really think it through.

9. Rushing to put in the offer

Of course, if the property you are eyeing is in hot demand, it is important to put in your offer FAST to secure ownership of the home before anyone else. However, that does not mean it all should be done without careful thought on whether the home is, indeed, the best home for you.

Be sure to take time to do your research on the area and how much the home should be worth, so you do not make the mistake of offering too high a price for the home.

The key to finding the perfect home for YOU is to be well-informed on all the information and insights on the home and your desired neighbourhood or location. And on the Guyub platform, you can find all that and more! Click here to start exploring more today.

The statement and information in the articles are the opinion of the writer and meant only as a guide. Any property purchase, rental or lease involve many legal issues and other complication depending on the individual facts and circumstances. Readers and Users are strongly advised to seek professional advise including from qualified and competent lawyers, bankers and/or real estate agent to verify the information and the statement before embarking on any purchase, rent or lease of any property. To the fullest extent permitted by law, we exclude and disclaim liability for any losses and damages of whatever nature and howsoever cause and arising including without limitation, any direct, indirect, general, special, punitive, incidental or consequential.

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