Buying a first home is equal parts exciting and daunting. On the one hand you’ve earned your reward from years of working in the form of a home, and on the other you’re also taking on pressure to keep up decades of mortgage repayments. Here are five little known tips to ensure peace of mind comes with your dream home.
1. Select trusted professionals who take the time to explain
Buying your first property is the time in your life when you: a) know the least about property; and b) are most in need of sound guidance by professionals. One of the ways to counter this is to a find a professional, whether they be a conveyancer, financial planner, mortgage broker, accountant, buyers agent or maybe even in some cases, a real estate agent, who take the time to explain the whole process of what is involved in purchasing a home.
If your chosen professionals don’t communicate effectively with you, you’ll have no idea what to expect or what kind of roadblocks and costs are ahead of you.
2. Quality control your contractors
Property professionals tell me that most first home buyers ask only two questions: ‘how much will it cost?’ and ‘when can you get it done by?’
While these are worthy questions, it won’t determine how well a professional will perform the job. Real estate is a bit of a rogue, unregulated industry. You really don’t know who you’ll be teamed up with unless you investigate.
Put them through their paces and don’t be afraid to call up their competitors, other professionals and industry bodies to check whether you should be using them or if they have an alternative recommendation for a better professional.
3. Check their PI insurance
Check that the professionals you use are all licensed and have Professional Indemnity (PI) insurance. This will give you cover if their advice is flawed or work is bungled. If your professional has paid their PI, they’ll be glad to give you a copy of their up to date policy. If they refuse to give you a copy, or the one they give you is out of date, run for the hills.
4. Top up your own insurances
When you buy your first home, your assets and liabilities drastically increase. You neither want to lose your assets or become overwhelmed by your liabilities due to factors outside your control. This is where insurance can be useful to cover you for some pretty realistic risks.
Life insurance, health cover, income protection and home and contents insurance are all worth considering.
5. Reduce your initial upfront costs
Money pressures start early when buying a home, so a good tactic is to spread costs out over time. Build up a stockpile of basic furniture, appliances and kitchen accessories before you buy a home.
One of the greatest ways to save money involves patience. When we buy items in a rush, we tend to pay top dollar. But if you have time to scope out eBay, Gumtree, Kogan, Victoria’s Basement and many of the online deal websites — you’ll pocket big savings on retail prices and will reduce your expenses when you finally move into your new place.
Peace of mind for the future
Regardless of what happens as you move further down the homeowners path, here are two time-tested rules you can take comfort knowing:
1. As you get older, your income will grow
2. You can start using your surplus cash to pay down more on your mortgage.
Securing peace of mind with your first home is easy when you take a smart approach. Become informed, reduce your costs and risks, and confirm that you’re using the right professionals.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Jeremy Cabral is a personal finance expert for Finder.com.au. He has a deep understanding of personal finance comparison helping over 5.4 million people compare financial products. When he is not working on the site, enjoys exercise and training on his new health kick.
Jeremy's passion for the internet started when he was 15 and working for his parents. After completing his degree in business and finance Jeremy has dedicated himself to genuinely helping Australians make informed choices about their finances. As the personal finance editor Jeremy strives to make sure each page on Finder.com.au answers what Aussies are looking for.