It has been widely reckoned that buying a house is a tough task, especially among the young generation who are struggling to own their first home.

Among them, many just dropped the plan and decided to become a long-term renter after they failed on their first few attempts of acquiring a home. 

While renting does offer plenty of advantages in some aspects, giving up all your hope in homeownership just because of a handful of failed attempts does not mean that you will forever be not qualified for a house.

In fact, that only means that you made some mistakes in the home buying process and thus ended up not getting one.

1. Trying to buy something that you actually can’t afford

One of the most common mistakes that buyers make is overshooting their budget due to the excitement of owning a home, especially if that is their first property.

There is also a common misconception among first-time homebuyers that their first home should be their “forever home”.

Hence, they will end up buying a property that comes with all the features that they dream about but also with a price that is beyond their affordability, which will eventually lead to loan rejection.

2.  Not appointing an agent

During the house hunting process, many would choose to go it alone without appointing an estate agent and hoping that by doing so, they will be able to save some cost.

But not having a professional and experienced agent by your side is often detrimental to your home buying process.

This is because without their expertise and services, you will have to spend a great deal of time to screen through hundreds or even thousands of properties to look for those that best suit your preferences.

Moreover, you’ll have to negotiate and decide how much to offer on your own. This may cause you to unknowingly overpay for your home – or lose out on one you want.

3. Not getting your loan application pre-approved by banks

This is one of the main reasons that buyers could not get a loan to fund their home purchase, especially for those who overestimated their purchasing power.

This is because what you think you can afford and what the bank is willing to lend you may not match up, particularly if you have poor credit, unstable income and high financial commitment. 

Hence, make sure to consult several banks and try and obtain an “In Principle Approval” for your loan application before you go house-hunting to prevent such situations.

In Principle Approval is an agreement that, in principle, the bank is willing to offer you a loan, subject to the confirmation of your personal details and credit status later.

4. Poor credit score

Many buyers would think they have a good credit record that can lead them to an approved mortgage, until they find out that they have missed a couple of payments on utility bills or credit cards when the loan application is rejected.

Besides late payment, having too many commitments, defaults or having been in bankruptcy can result in a poor credit score that can be lethal to your loan rejection due to the stringent lending policy by banks. 

On the other hand, the chances of getting a loan approved is also low if you have insufficient credit history as banks are unable to gauge your reputation as a solid paymaster.

So, in order to improve your credit record, you should start paying more attention to your existing repayment while maintaining good spending habits.