Advice
For first-time home buyers: How to avoid costly mistakes?
29/11/2018 16:02 | Source: Bankbazaar
For almost first-time home buyers, owning a home can be a very rewarding experience. With a little caution and some attention to detail, you can avoid costly mistakes.

Bankbazaar suggests some simple tips below to help first-time home buyers avoid pitfalls that could prove to be costly mistakes.

Try window shopping

If you are going to take a bank loan for the purchase of the house, then you need to make sure that you don’t settle for the first loan that is offered to you. A little bit of research may show you some options where you may be offered lower interest rates or better loan amounts.

Crunch the numbers

Beyond just knowing how much the flat in your desired estate will cost, you need to factor in additional costs such as option fees, down payment, and interest payable over the 25-year period. 

Make sure you have enough money to cover the initial down payment for the house. If you don’t have it yet, then wait and save more till you do. And when checking the numbers, do not take any emergency fund into consideration.

For first-time home buyers: Tips to avoid costly mistakes?

If you plan your purchase carefully and don’t buy a house that is more costly than you can afford, you’ll be able to pay your monthly instalments entirely through CPF. This way, you won’t feel the pinch on your monthly budgets.

Image emergency scenarios

Never take emergency funds or reserves into consideration when scrounging up cash for the down payment. Especially, in your zeal to buy your dream house, don’t exceed your budget and break your emergency funds.

Costs tend to creep in slowly and funnelling your money into the loan instalments will leave you ill-equipped to meet any emergency expense that might crop up. You can never know when or where your car might break down, so set aside some savings to help soothe things over for a while.

Inspect the potential home

Of course, you need to really check the house. A simple Google search will turn up many horror stories of defective windows, scratched doors, cracks in the walls, electrical points that don’t work, etc. Arm yourself with a stack of post-its and marker to highlight all of these defects. 

Additionally, you don’t want to end up owning a home and paying a loan instalment on one end and an equal amount towards repairs on the other.