It doesn’t matter how old you are when you buy your first home but it always pays to be prepared!
No matter if you’re a young first home buyer, or a mature older buyer! If unprepared, the first home buyer always makes the same mistakes!
So here are a few simple and seemingly obvious tips that too many people forget to think about and to prepare for, before they embark on the buying process.
But don’t forget to ask for help. There’s always somewhere to go, and we at HomeSource have a property lawyer service which is very affordable and you can ask any questions about the buying process. Click here and find out more about HomeSource Access.
Now to those most common mistakes and what you should do about them.
1. Check out your credit
It’s really important that you, firstly, purchase your credit report. A credit report is a basic history of your past financial activity and is one of the main factors in determining whether or not you get your loan. Approximately 1 in 10 Australians have a negative listing, preventing them in getting a loan. Checking your credit score in advance gives you the knowledge and therefore opportunity to improve your score should it be required.
2. Do your research
When looking for potential lenders don’t get distracted by deals that look too good to be true – most of the time they are! There are many lenders who structure their mortgage rates to look great, but they have eliminated all other privileges. Make sure the loan is right for you and your circumstances.
3. Don’t apply for new credit at the same time
Once your lender asses your credit and your current assets, they will calculate how much equity (money) they will lend you. In order to achieve the highest amount of coinage, avoid taking out other loans or making big investments before applying for your mortgage. If possible, try to avoid applying for any credit in general.
4. Consider using a good Buyer’s Agent
A buyer’s agent can provide you with all the knowledge you need to make an informed decision about a property and its value. They are specialists in searching, locating, evaluating and negotiating the purchase of a property and can save you a significant amount of time, money and stress. But remember they are not free!
5. Job hopping
In order for the lender to provide you the loan you are hoping for, you need to have a stable and consistent income. Changing jobs wouldn’t be the best idea during this period of time. If you have been in between jobs or you have been job hopping, the lender may decide not to approve your mortgage. In addition, it might be good to wait making any major changes in your working life and wait until after your purchase.
6. Get your pre-approval
Pre-approval is a lender’s written assessment of how much money they will lend you based on your income; living expenses; and repayments for existing loans. A pre-approval will give you peace of mind knowing that finance is on hand when you’ve found the home you’re ready to buy.
7. Don’t underestimate the cost of owning a home
Buying a house can be a great investment for your future, as opposed to renting a property and paying someone else’s mortgage. However it’s a costly business! Owning your own home means that all the cost falls back on you - unlike renting a property - if anything goes wrong it’s up to you to fix. It’s important to be prepared should these circumstances arrive.
8. Keep your feelings in check
When looking at potential homes it’s important to be mindful of showing to much emotion. You’ve probably already figured out where to put your couch and what colour you want to put on the walls but keep it to yourself. No matter how much you love the house, don’t let the seller’s agent notice this. If he does, he will gain the upper hand in negotiations.
9. Don’t forget the survey
It is absolutely vital that you know the condition of the property you are investing in. A professional surveyor will conduct an in-depth survey of the property and will provide you with a detailed report of the assessment, indicating if there are any hidden problems with the property.
10. Read Your Contract
Last but not least, don’t sign anything before you have read the whole contract. This is an extremely important document as it contains all of the terms and conditions of the mortgage including your obligations, costs and privileges. You can sit down and read it with your agent, so you can ask them any questions you are unsure about. You can also add clauses into the contract.
So don’t forget to prepare, research, and talk to experts that can help you. Read the information you’re given. And if you need the help, join us at www.homesource.com.au/access or call us to sign up for 60 minutes of legal advice over the phone. What more beneficial help could you find!