- Posted 01 Dec
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As a first time home buyer, you’re going to have a range of decisions to make – what’s the best way to finance my new home? Best mortgage? Where should we even live?
Your first time out, there’s no way you can know all the details, but there are some mistakes you can avoid. Here are a few of the most common ones.
1. Not Managing Emotions
You’re gong to encounter a range of new experiences, people, and financial issues. These can wreak havoc on you emotionally, and if you don’t take care and don’t keep your emotions under control, you run the risk of getting taken advantage of.
You can’t make wise investment decisions if you’re under stress, so make sure to stay as objective as you can, and think through every decision as much as possible before deciding. Your emotions can get in the way when it comes to the minutiae of the home finance process, such as making sure to read through all the fine print when finally accepting your mortgage terms and conditions.
2. Not Budgeting Properly
Ok, so let’s assume you have the financial freedom and savings to be a home buyer. Now you need to ask yourself, how much can I afford? When coming up with your budget, it’s crucial that you stick to it, or you may find yourself with a range of added costs you never intended.
It’s always wise to add some extra buffer into your budget, as there will always be things you didn’t consider and unexpected costs you couldn’t have foreseen. Be disciplined and conservative here – this is no time for risk taking. If you don’t do this, you may not be able to cover your mortgage when it comes time to make that first payment.
3. Not Factoring in Hidden Costs
As we just mentioned, there are going to be hidden costs that you can’t always foresee. Some of these could be:
- Building inspections
- Pest inspections
- Stamp duty
- Legal fees
- Moving costs
- Fees from mortgage lenders, such as application, valuation and settlement fees
These are all new things you didn’t have to worry about when you rented. Just be prepared and know that you will have to include these in your budget as well.
4. Not Being Prepared
Before you buy and sign on the dotted line, there are a lot of decisions to make. You want to make sure you’ve taken care of them all, so that when it comes time to make your move on the home you want, you have everything in order.
You’ll need to be pre-approved from your lender, and make sure you have all your paperwork together. You’ll also need documentation of your loan, and you’ll have to pay the deposit immediately.
Make sure to be aware of these common mistakes so you don’t run into them yourself! Surround yourself with knowledgeable people, and take the time to do things correctly. It takes some time, patience and discipline, but if done right, you’ll be a happy homeowner in no time.
If you need some help with your first home loan or help with the buying process, contact our experience team today to discuss your next steps.