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Buying a home is a huge step, but there are others who have travelled the beaten path that you are about to take and made a few mistakes. Knowing these mistakes can save you finances that you could possibly lose. Here are six tips that you can hold on as you open the door to your next ‘big’ chapter.
1. Don’t just buy for your current circumstances
Think of your potential home as a long-term investment. You might be single and thinking of convenience, but think of the long-term potential or lack of potential your house might have when it comes to selling.
Before buying a house look at the neighbourhood in which it is situated. The type of neighbourhood can impact your reselling price by 10%. This is where doing your own research will come into play. Also, keep in mind the amenities that it is close to. Does it have good schools, hospitals, roads and shopping centres? These could be a good marketing point when it’s time to sell.
2. Choose something that matches you
The dream of owning a house with a large backyard and luscious landscape with a water feature cascading in the front might be something that makes you all warm and fuzzy, but those feelings can soon be dispelled when it comes to the upkeep of these things. Look at the type of lifestyle you live and your finances when it comes to settling for something. You will have to be realistic and ask yourself if you will be able to maintain it in the long run, or will it become a financial burden.
3. Inspect the property you want to buy thoroughly
Don’t be dazzled by what appears on the surface and rush into signing the papers. Before you even consider putting your name on the dotted line have a thorough inspection of the house for any problems. You can seek professional help through a property surveyor who will help you see things that you overlooked. Consider a pest inspection as a top priority before you move your family into a home that is shared by roaches or rodents.
4. Time is your prized possession
Real estate agents have the gift of persuasion and you could feel pressured by their prospect of ‘This is hot property and could be snatched up.’ If you feel pressed to sign anything in a hurry, stop. Take a step back and breathe. Even if it does get snatched up, you still have time to make an informed decision that won’t end up costing you financially because you were in a hurry. Take your time to shop around and compare, you will be surprised to find great deal are going around at an affordable rate.
5. Do you have adequate financing?
One thing that you will be quick to find out about when buying a home is that it gets expensive. You will need deep pockets to fund your mortgage. Not many Australians have that kind of money upfront which is why most opt for a home loan that can bring thing closer to owning their home.
Before you get lost in the process of finding a home you can buy, you will have to find out if you are eligible for a home loan. Prepare a deposit that is big enough to get your door in the property market door. A general rule of thumb for a reasonable deposit size is 20% deposit.
6. Crunch the numbers
After that, you will have to crunch the numbers for all expenses and fees that come with buying a house so that you can get a home loan that adequately covers your expenses that also cover surprise expenses such as removalist costs, pest inspection reports, stamp duty, and registration fees.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
