First-Time House Buyers' Mistakes
Taking your first step onto the property ladder is a special milestone, but getting there can be confusing and costly, especially if you’re unprepared. We’ve outlined some of the most common first-time buyer mistakes and what to do instead to help you navigate getting the keys with ease.
1. Failing to set a budget
One of the most common mistakes first-time homebuyers make is researching houses before setting a budget. This puts you in danger of falling in love with – or worse, committing to – a property you can’t afford.
Take time to review your finances and work out a maximum spend. If you’re planning to use a mortgage to supplement a deposit, you could get an agreement in principle (AIP) from a lender to check how much you could borrow. This could help you identify an affordable property price range but bear in mind that an AIP is a rough guide rather than an official commitment and will expire after a set period.
Other costs to consider include:
- Potentially having to offer over the asking price
- Whether the property will require immediate renovation
- Your wider spending and saving requirements
This will help ensure you don’t go over your budget.
2. Underestimating associated costs
There are many costs associated with homeownership, from one-off fees during the buying process to long-term living expenses. Some are easily overlooked as a first-time buyer, which could lead you to make expensive mistakes when calculating what you can afford.
What are the core costs of buying a home?
- Deposit
- Legal fees
- Mortgage arrangement or property valuation charges (if applicable)
- Stamp duty – you may be eligible for Stamp Duty Land Tax relief as a first-time buyer
- Removal costs
What are the main homeownership expenses?
- Mortgage repayments (if applicable)
- Council tax – you should be able to check the council tax band of a property before buying
- Essential bills – such as water, broadband, electricity, and gas
- Maintenance costs
- Service charges and ground rent (if purchasing a leasehold property)
- Buildings insurance – a standard condition of most mortgage lenders
3. Skipping important steps
Researching mortgage offers
It’s common for first-time buyers to stick with their current bank or go with the first lender they contact when arranging a mortgage, but this could mean missing out on great offers.
The number of lenders out there might seem intimidating if you’re trying to research the differences between them. Mortgage brokers may be able to help here. Many provide fee-free services to homebuyers as they take a fee from the lender they match you with. Some might also strike exclusive deals with lenders that you wouldn’t be able to on your own.
Improving your credit score
Your credit score influences your mortgage offers and chances of approval, so finding ways to improve it ahead of making an application could prove beneficial. Small things like registering to vote and keeping credit card balances low may positively influence your score.
Making too many credit applications just before securing a mortgage is a common first-time homebuyer mistake. Too many hard credit checks, conducted for things like car finance or credit cards, in a short time could affect your score and make lenders more cautious about lending to you.
Organising a property survey
Property surveys aren’t usually a mandatory step in buying a home, and first-time buyers may be tempted to skip them to save money. However, they’re highly recommended as a way to protect your investment and help avoid costly issues further down the line. There are three levels of survey, with a level 2 survey seen as suitable for most properties. A survey can help uncover hidden structural issues, such as damp and roof damage.
4. Valuing the wrong things
When viewing properties, have a list of priorities in mind and use these to evaluate whether homes are suitable for you. This could help you avoid classic first-time buyer viewing mistakes like falling for the décor and ignoring more important features.
Location is a key factor to consider in terms of safety and convenience. Is the property well-located for public transport or local schools? What amenities are on the doorstep? How do local crime rates compare to those in other areas nearby? Where you live plays a huge role in your long-term satisfaction and could influence how easily you’re able to sell your home in the future.
Speaking of the future, it’s easy to focus exclusively on your current needs as a first-time buyer. But future goals might impact your housing requirements, so thinking ahead is crucial in securing a property that can grow with you or maybe grow in value if you come to sell in the future.
Consider investing in your home with Evolution Money
Hopefully, now you know the common first-time homebuyer mistakes to avoid, finding and completing on your home can be smooth sailing. When you’ve moved in, we’re here to help you make the most of your investment.
With our Home Improvement Loans, you could borrow between £5,000 and £105,000 towards property renovation at flexible terms tailored to you, supporting you in creating your dream home. Check your eligibility – it won’t impact your credit score – or contact our friendly team. For more information on personal finance, you can visit our help and advice hub.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it.
Loans are subject to status and affordability checks.
Representative 17.46% APRC (Variable)
For a typical loan of £23,120 over 120 months with a variable interest rate of 17.46% per annum, your monthly repayments would be £442.07. This includes a Product Fee of £2,312.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £53,047.80. Annual Interest Rates range between 8.6% to 27.87% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
