Buying your fist home is a super-exciting time and a big part of that is the magnitude of what’s at stake.
Making poor decisions in your first foray into the property market can cost dearly so it’s important to avoid the avoidable.
With prices down and lending restrictions being eased, it’s a great time for first-home buyers to strike but if that’s you, be mindful of these eight potential floor traps.
Being budget savvy
Have a very clear budget in mind before you start looking and stick to it so you don’t get stuck chasing houses you can’t afford.
If you’re uncertain, speaking to a mortgage broker will help you to know how much a bank will lend you.
Save a 20% deposit
It can be hard work, but not getting together at least a 20 per cent deposit is expensive because you’ll have to shell out for Lenders Mortgage Insurance (LMI).
LMI is insurance that protects the lender in case you default on your loan and it can cost you thousands.
Be real about interest rates
We all know interest rates are at record-lows but history tells us they won’t be this low forever.
Remember, your loan will probably span decades so be prepared for the extra costs when they go up.
Leave a little spare cash
It’s so tempting to use every available cent to get the best and most exciting property possible, but it can really pay to leave some spare left over after your purchase.
There’s stamp duty, building inspections, strata reports, transfer fees, legal fees, moving costs and possible renovation costs.
Very wise to budget for having some spare finances after purchase.
Complete building reports
Do not even think about skipping independent building and pest reports to save a few bucks. If there’s problems it could end up costing you tens of thousands.
Check grant eligibility
Governments all around Australia are being pressured to stimulate the economy and property market so make sure you thoroughly check the grants currently on offer for first-home buyers to see if you’re eligible.
Be wary of shiny real estate agents
Real estate agents are paid to sell you the dream. Be mindful that you aren’t becoming emotionally attached to a property because of the stunning furniture and styling – it’s not yours!
If you’re buying off-the-plan or a land package, make sure you check the fine print for what you will be getting exactly.
Be prepared to negotiate
Price negotiating doesn’t come naturally to everyone but if you can get past it and ask for a better deal on both your property and home loan, you might be able to save a packet.
If you don’t ask, you’ll never know.
