Welcome back to the Velvet Runway and this feature about Common Mistakes to avoid as a First-Time Homeowner.
Oh, the feeling of getting the keys to your first home. After that long road, you can finally settle down into the home that you worked hard to achieve. But sometimes, the excitement of being a first-time homeowner can get in the way of making the right decisions when it comes to making your house into a home.
Becoming a homeowner for the first time is exciting, but it can also be a learning curve filled with potential pitfalls. Whether it’s underestimating maintenance costs or skipping key inspections, there are some common mistakes that first-time buyers often make.
Common Mistakes to avoid as a First-Time Homeowner
Here are seven common errors to avoid to ensure your first home purchase is a success
Table of Contents
- Skipping the Home Inspection
- Overextending on the Mortgage
- Neglecting Energy Efficiency
- Buying all your furniture in one go
- Painting too much.
- Not Understanding Homeowners Insurance
- Ignoring Future Resale Value
1. Skipping the Home Inspection
One of the biggest mistakes first-time homeowners make is opting out of a thorough home inspection. It may seem like a way to save money upfront, but skipping this step could lead to unexpected expenses in the future, such as dealing with hidden structural issues, plumbing problems, or faulty wiring.
Pro Tip: Always hire a qualified, independent inspector, and make sure they evaluate everything—from the roof to the foundation.
2. Overextending on the Mortgage
It’s tempting to stretch your budget to get a bigger house, but this can put a strain on your finances. Many first-time homeowners make the mistake of focusing on the maximum loan amount they qualify for, rather than considering their actual monthly cash flow, which includes not just mortgage payments but also taxes, utilities, and insurance.
Pro Tip: Choose a home you can comfortably afford based on your monthly income, not just the total loan amount you qualify for. Stick to the 28/36 rule: your mortgage should not exceed 28% of your gross monthly income, and your total debts should not exceed 36%.
3. Neglecting Energy Efficiency
Many first-time buyers overlook energy efficiency when choosing a home. This can result in higher utility bills, especially in homes with outdated windows, insulation, or HVAC systems. Investing in energy-efficient appliances and home upgrades can save money in the long term and make your home more comfortable.
Before buying anything for your home, create a master checklist of what you need, want and wish for. If you’re furnishing a home on a budget, you’d want to prioritise the things that you need like a heat pump in NZ that will keep you warm during the rough winter months. Just imagine having a very expensive couch and still feeling cold because you don’t have a good heat pump which is an energy-efficient alternative to furnaces and air conditioners for all climates.
4. Buying all your furniture in one go.
Your first home basically means that you’re working with a blank slate and that means the possibilities for furniture, appliances and decor are endless. But if you go into a store without a game plan, you’ll easily waste your money on the wrong things.
Are you moving into a bigger home than what you’re used to? For sure, you’d want to fill your home with new furniture right away. But did you know that it’s not necessary to move into a fully furnished home? In fact, it’s smarter to slowly build up your home while already living in it because it allows you to know exactly what type of furniture would suit your lifestyle. Even if you have the money to buy everything at once, don’t get tempted into it because you could easily make costly mistakes that would ruin the entire ambiance of your house.
4. Underestimating Maintenance Costs
Many new homeowners are shocked by the ongoing costs of home maintenance. Routine tasks such as lawn care, plumbing fixes, and gutter maintenance can add up quickly. Not setting aside funds for these expenses can strain your budget and lead to deferred repairs, which can be more costly in the long run.
Pro Tip: Create a maintenance budget that covers both routine upkeep and unexpected repairs. Financial experts recommend saving 1-2% of your home’s value annually for these expenses.
5. Painting too much.
We all know how much difference a paint can make to your home and if you’ve been renting for a long time, for sure, you’re excited to paint your walls. But if you really want to achieve a more cohesive aesthetic, it’s very important to not overdo painting, especially having too many accent walls around your house.
The rule here is to stick to one accent wall per room and only two in the entire house. The purpose of an accent wall is to draw the eye to a focal point, so having too many accent walls will defeat its purpose.
Choose a common colour for the rest of your house and just stick to one accent wall. And if you have a house with great architectural features like exposed beams, a beautiful fireplace or massive windows, you can actually skip the accent walls altogether.
You should also just stick to one or two colour palettes to keep your house from looking too busy and chaotic.
6. Not Understanding Homeowners Insurance
Buying homeowners insurance is essential, but many first-time buyers don’t fully understand what their policies cover—and more importantly, what they don’t. Flooding, earthquakes, and other natural disasters might not be included in standard policies, leaving new homeowners vulnerable.
Pro Tip: Read the fine print of your homeowners insurance and consider additional coverage for natural disasters if you live in an area prone to such risks. It’s worth paying a little extra for peace of mind.
7. Ignoring Future Resale Value
When purchasing your first home home, it’s easy to get caught up in how it meets your current needs without considering its resale potential. Whether you plan to stay for a few years or a few decades, buying a home with strong resale value can protect your investment in the long run.
Pro Tip: Pay attention to factors that impact resale value, such as the neighborhood, school districts, and access to amenities. Even if you don’t have children, buying in a good school district can significantly affect your home’s value.
Final Thoughts on Common Mistakes to avoid as a First-Time Homeowner
Buying your first home is definitely an exciting season in your life and you’d want to do things right the first time. But remember that it doesn’t have to be perfect right away. The beautiful homes you see in magazines took years to reach that state, so take your time and build as you go.
I hope you found this feature about Common Mistakes to avoid as a First-Time Homeowner helpful, and have a look here for more home inspiration.
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