3 Disastrous Decisions When Buying a House
Buying a house can be a life changing decision for you and your family, even with falling house prices. Along with a mortgage there are legal fees, stamp duty, removal costs, and if you are selling there is a nice big estate agent fee as well. That’s a lot of money and time and effort, so it is vital to get it right. There are 3 basic decisions/guidelines that can easily be ignored or got wrong, which can make the dream purchase turn sour.
Location – nice house shame about the neighbours
You have discovered the perfect house. The layout is just right with a fantastic conservatory, and not much decorating required. The kid’s rooms are just perfect. But what about the local facilities? Is there a suitable school nearby? Are shops within a reasonable distance? Is the property located on a suitable road? What are the neighbours like?
It’s the easiest thing to go with emotion when buying a house and purchase a property purely on the property itself - the ‘dream home’. However location, location, location is just as important, and not doing the homework can prove to be disastrous.
Affordability – not planning.
Before deciding on a property it’s important to set a budget based on affordability, which may mean seeking professional advice to get to the bottom of your finances. Viewing a property out of the budget range and blindly going for it can be crippling. Different lenders have different lending criteria and choosing a lender purely based on the maximum that can be borrowed may mean a much higher rate of interest and high fees, meaning not only is more being borrowed than can really be afforded but the cost of the loan is more than it need be. Again it can be the heart ruling the head buying a house you can’t really afford.
Tunnel Vision – Not taking on as much advice as possible from a variety of sources.
The classic is “i’ve always banked with Acme Building Society, they’ll sort me out…” or “never trust a broker!”. The point is glean as much information as possible across the whole market through a variety of sources, looking at rates, setup fees, redemption fees, terms and conditions etc. The likelihood is you’ll probably end up coming back to the same 2-3 products, but you’ll be able to make a fully informed and confident final decision. Buying a house and changing your mind a few months down the road will be an expensive mistake.