5 Biggest Mistakes Made byFirst Home Buyers Source: www.remaxwagga.com.au
1. No or very low down paymentMany first home buyers are taking advantage of home loans. Buyers need to be aware, that yesthey can possibly buy a house without a down payment BUT what will this mean for repaymentsand your finance down the track?Therefore, people that haven’t been able to save for down payments or that have small downpayments, this means your monthly repayments will be more and the interest you pay will belarger each year. This is because the mortgage you have is higher and because you are more of arisk to lend money too.
2. DIY home loansIt’s not all about the interest rate and your bank is not the only option. A home loan has a numberof technical parameters which you may need in the future. You may need to split your loan,refinance, redraw or offset your tax effective savings against your loan in the future.Ask your broker or consultant to review your financial position, future plans and let the experts findthe best loan that suits you not the lender.Are you being realistic about how much you can repay a month? It may be best to factor in someunwanted spending money, as unwanted bills do like to pop up now and again. You don’t want toput yourself in a situation where you can’t afford to live!
3. Professional inspectionsIf you buy a house, the last thing you want is to see that there are problems which will cost a lotmore to repair than you thought they might. Suddenly, your big profit is looking like a small profit, abreak-even deal, or even a loss.Ask your consultant to refer you to a registered professional building and/or pest inspectionservice. You will receive a comprehensive report which you can legally use to break an unfair deal.
4. The right time to make an offerIt is ideal for a person looking for a home to buy in a buyer’s market. When the real estate marketis cold, you will find the sellers more willing to negotiate because it is harder to sell a house at thattime. Keep in mind when you make an offer for a home, you want to compare prices of other likehomes with similar configurations, age and location to the one you want to buy.You also must have a reliable home loan pre-approval in you hands to make sure you will not getcaught up with nasty surprises in the middle of a binding contract.If you work along with an expert consultant, you don’t have to worry about the financial or legaljargon as they walk you through, safe and secure!
5. Waiting too longYou need to find the balance between rushing and waiting too long. The property marketfluctuates all the time, so if you have found a house the suits all your needs and you have found alender that is giving you the best loan for what you need, then you should be comfortable inclosing the buying process.Once you have most of the important things reasonably ready, then it’s the right time to act. Don’twait too long for bigger deposit or the best rate or the best house ever, coz the property pricesmay go up more than you can afford to catch. The perfect time never comes!