Important Tips for First Time Home Buyers
Buying a home for the first time is exciting and terrifying at the same time but fret not, low deposit mortgages are helping first time buyers to get on the market. However, it can also be a difficult process, especially if you are determined to find the perfect place. The buying process can be a stressful time, which makes people susceptible to home buying scams. Here is a look at some common scams that you must watch out for if you are buying a home for the first time.
1. Hidden Fees that First Time Home Buyers may not be Aware Of
For first time home buyers, it is important to always read the fine print on any home buying and/or mortgage contract that you are going to sign. First time home buyers are often the most naive, and are targeted by dishonest brokers and scam artists. Read everything two or three times, and have a lawyer look the documents over.
2. Lack of Knowledge can Lead to Vulnerability
Knowledge is power. Information in this case is everything and very often people can become overwhelmed with the bombardment or lack of information thrown at them. It is therefore crucial to know what questions to ask the lender in order to fully understand the process and know what would be required of you. The same goes for work that may need carried out on the house prior to moving in or general upkeep and maintenance, which all needs to be considered and not assumed.
3. No Phone Numbers or Physical Addresses
Beware of any company/person/entity that does not give you a legitimate phone number and physical address. Too many times scamming companies will have online phone numbers and/or a postbox for mail. This means that it is incredibly difficult to locate them after the event of a scam. If you have a physical address, you will be able to find them, or at the very least give the address to the police.
4. Predatory Lending to Unaware First Time Home Buyers
Beware of any company that is offering you a very high interest loan or a loan that has to be fully paid back within a few years. Some of these companies prey on first time home buyers who are desperate to get approved for a mortgage but know that they do not have the credit background to qualify for one. If you are in such a situation, it is better to build your credit instead of going for a scam that could leave you in huge financial trouble.
5. Absurd Valuations
For first time home buyers, if you are willing to buy a house and you notice that the asking price is absurdly low, it is important to do your due diligence on the property. Speak to a reputable broker that you can trust, or do some digging yourself. Sometimes there are problems with the house, the land it is built on, or the area in question, and home owners want to sell properties as cheaply/quickly as possible. In most cases, if a house is valued ridiculously low in comparison to similar properties in similar areas, there is likely to be something wrong with it.
First time home buyers should be aware of these types of scam when purchasing property because it can spell the difference between being able to achieve your dream of owning your first home or being someone who will end up drowning in debt or worse homeless.
Lindsay Edwards is a freelance writer who writes about money and business and is regular contributor to many to of the top finance blogs. When she isn’t writing, she enjoys the outdoor life, Italian food and Crossfit.