Take a look at our list below to avoid falling into these traps:
These are the most common mistakes that first home buyers sometimes make.
- Avoid changing jobs or making a major purchase at the same time as applying for home loan finance. It’s important that you appear as stable (and therefore as low risk) as possible in the eyes of a lender.
- Failing to have home loan finance pre-approved, and leaving everything ‘too late’ when the ‘right’ property is found. It’s a competitive market for first home buyers and being able to move quickly once you have found a suitable property can be the key to securing the right place at a good price. If the home you want is for sale by auction, having loan pre-approval means avoiding the very real risk that you may not be able to arrange finance in time if you are the highest bidder – or worse, not being approved for a loan that covers the purchase value.
- Borrowing right up to the amount the lender is prepared to loan you, and then getting over-stretched financially.
- Letting emotions take over in the negotiation process, and paying too much for the property – or missing an opportunity to negotiate more favourable purchase conditions.
- Not checking out things such as council zoning, building approvals and restrictive covenants. Your solicitor or conveyancer can do this on your behalf and it can mean avoiding a costly mistake buying a home that proves to be a disappointing purchase.
- Buying a ‘do-up’ and then running out of money. Renovation is not a cast-iron route to riches, and if it turns out to cost more than you bargained for, you could face incomplete renovations or find yourself under serious financial stress. If a property requires major renovation work, take a qualified builder you know and trust to inspect the place, and ask for a quote on the likely cost of work required to be completed.
- Forgetting to sort out property insurance well before you move in, and neglecting to tell utility companies or other bodies such as your bank, superannuation fund and motor vehicle registration authority about your change of address.