For some of us, it will be a new apartment, for some, a brand new estate home, and for some, a fixer-upper in the suburbs. Finding somewhere affordable for first home buyers can be difficult enough, so it’s easy to understand why so many of us make beginner’s mistakes when buying a house.
We’ve identified seven of the easiest errors to make as a first-time buyer – here’s how to see through the fog of excitement and anticipation, and avoid the pitfalls of buying property for the first time.
Not accessing the First Home Owner’s Grant
Depending on when you plan to buy, how much your new home is worth, and which state you’ll be buying in, you could be eligible for tens of thousands of dollars via a Government First Home Owner’s Grant. Make sure to do your research in full, and ensure you meet all criteria before applying. Having this grant on your side may mean you can collect the keys to your new home sooner! Find out more via the Australian Government website here.
Not getting pre-approved
Just knowing your borrowing power is great, but getting pre-approved by a lender for a specified amount can prove vital. Not only can you then set a price range ceiling for yourself with certainty, you’ll be able to make an offer with confidence when you find the perfect place. No last minute mad-rush!
Not researching your mortgage options
You may have been knocked back for a mortgage in the past, or you might be completely new to home finance – either way, doing your research on what’s available may save you money in the long term, and help you buy sooner. Knowing about options like guarantor-loans and packaged loans, and weighing up the offerings of these products against your needs now and into the future may prove wise for any first time buyer.
Borrowing too much
There is a tendency among first home buyers to borrow to their limit. You should think carefully about this – while you may feel you can service a loan at the top end of your borrowing power now, who knows what the future may hold? Plus, if you’re stretched financially just to afford your new digs, how are you going to enjoy the finer things in life, like renovations, appliances and furnishings (or god forbid, a holiday every once in a while!) It’s your first place – put your forward thinking cap on here, and consider buying something that both meets your needs, and is within your means. Calculate your borrowing power in seconds using our handy online tool here.
Not getting pre-purchase inspections done
Found a place that seems too good to be true? If there’s something fishy about the price of a property, don’t look to skimp further by skipping the pre-purchase inspection report and pest inspection. While it may look a million dollars on the outside, it might be what’s hidden from view that can end up costing you thousands in repairs. Know what you’re getting – buyer beware!
Not knowing the full cost
You’ve been so focused for so long on just saving for your deposit. Before you finish saving and head off house-hunting, make sure you’re financially prepared for the full cost of buying, including some of the lesser known costs like Stamp Duty, home insurance, council rates, moving costs, legal fees, etc. You’re almost there – avoid disappointment at the final hurdle by making sure you’ve got all the boxes ticked (then start packing your boxes!) Calculate your Stamp Duty online in seconds using our handy tool!