Buying a property is a momentous decision that could permanently alter the course of your financial future. To make sure it changes your life for the better it’s essential that each choice you make before and after buying is the right one as mistakes could be costly.
From choosing the right home loan, to researching before you buy there’s so much to consider that mistakes can be made. We’ve identified four mistakes made too often by home buyers and explained each one, with the aim of making your purchase as positive and stress-free as possible. Here’s to happy home ownership!
Skimping on the market research
The right research can help you identify which properties, in which areas are likely to gain value in the near future, as well as areas to avoid, where high rental yields can be found and much more.
Use authoritative data from sources like Residex, or CoreLogic to identify market trends. If you’re feeling a little lost enlist the help of a buyers agent, who will be legally obliged to work in your interest and should have extensive market knowledge.
An example of research guiding a decision can be seen using NAB’s house price data. This shows that in general houses are more likely to experience value gains than units. This data would guide home buyers looking for capital gains in Victoria to houses over units. Do your own research and use it to guide your decisions!
Not getting loan pre-approval
Loan pre-approval is an incredibly useful tool when searching for your home. Your real estate agent and the vendor will identify you as a serious buyer, you’ll have a clear idea of how much you can spend and you may find the process of actually approving your loan far easier when it comes time.
Forgetting about the extra costs
Buying a home costs more than the sale price. House prices are so sky high at the moment that this is understandable, but forgetting the extras could cost you in the long run.
These could include the following:
- Moving costs – differs on a case by case basis.
- Mortgage fees – will include establishment fees, late fines, legal costs and much more. Varies case by case.
- Stamp duty – Differs from state to state and scales with the amount of your loan, as well as the intended use of the property. Will likely exceed $10,000.
- Pest and building inspections – According to the Australian Pest Control Association a pest inspection should cost you around $350, and a building inspection should cost roughly the same. These may vary depending on the size, location and age of your house.
- Legal costs, conveyancing, and much more – The Australian Institute of Conveyancers estimates this cost will usually be between $900 and $2,200.
- Overstretching your finances
As you can see there’s a fair bit involved when buying property! All the costs, logistics and tasks involved can get on top of you, which might be what happened to the 1.2 per cent of Australian mortgage holders that Moodys reported as being 30 days or more in arrears.
Don’t be a part of the unfortunate 1.2 per cent. Avoid making the above mistakes at all costs and if you’re struggling with your home loan, let us put our experience to task to help. With professional advice your home loan will suit your needs to a tee, making the entire process smoother and easier.