8 July 2018
Buying a home is a very daunting task, especially if it’s your first home. That’s why we have put together 5 common mistakes that all first home buyers should try and avoid.
1. Underestimating the Costs of Buying
When you buy a home, you are paying for a lot more than just the cost of the house. Keep in mind that some additional costs can include: moving costs, home insurance, council rates, transfer fees, stamp duty, and inspection reports. Underestimating these fees is a mistake that many first home buyers tend to make. Make sure you do up a budget and write down all the possible costs that might come your way.
2. Going Beyond Your Budget
Many first home buyers make the mistake of buying a home that’s way out of their price range, which could derail their finances in the future. All home buyers know the feeling of falling in love with a property that is just that little bit over budget, but spending more than you can sensibly afford leaves you exposed to potential financial strain, including rises in interest rates. Worse still, you might not even be able to enjoy life in your new home. Ensure that you also allow for changes in your future circumstances.
3. Not Understanding Your Loan Options
Choosing the right lender and mortgage is just as important as selecting the ideal home. Getting a home loan is a lot easier now than it was in the past, when you were saving years just to get a deposit. It might be easier now, but it is also riskier and can be more expensive. Make sure that you understand the different loan options before purchasing your first home. Some loans are ideal for first-home buyers with a limited budget and little deposit, while others work better for buyers who have a more disposable income and a hefty down payment.
4. Not Taking Advantage of the First Home Owner Grant
Depending on when you plan to buy your first home, how much your new home is worth, and which state you will be buying in, you could be eligible for tens of thousands of dollars via the First Home Owner Grant government initiative. Make sure you do extensive research and meet all the criteria before applying. Find out more via the Australia Government website here.
5. Failing to get a Property Inspection
It is important to engage a competent professional to inspect your potential new home for a variety of reasons. These inspectors are skilled in finding major faults, so don’t panic when they produce a long list. Apart from their ability to discover potential problems with the property, they can also be used to negotiate on the purchase price. If you are having trouble interpreting the report, have a chat with the property inspect and ask their opinion on purchasing the home.