Buying your first home involves more than finding a house and securing a home loan. Prepare yourself for the journey to come and keep your stress levels at a manageable level by avoiding the most common first home buyer mistakes.
Research and preparation
The financial commitment involved in buying a property is huge so before you go house hunting research suitable locations, house prices and resale values. Combine this with a clear plan as to what you can afford to pay and you’re ready to start viewing potential purchases.
As well as setting a price limit (remember to factor in all of the add-ons like stamp duty, surveys, legal fees etc) it’s a good idea to seek pre-approval for your home loan. Banking websites will tell you how much you can potentially borrow based on very little personal information but you may find the situation to be very different when you appear in person to apply for your loan. Be a savvy first home buyer and shop around before seeking pre-approval.
Don’t buy a house until you’re emotionally and financially ready. Get your ducks in a row and make the leap when the positives outweigh the negatives – don’t rush in just because it’s a buyer’s market or interest rates are low.
Breaking the budget
You’ve found the perfect house but it’s just out of your price range. Sometimes going a little bit over is something you can factor into your financial plan but it’s a fine line from spending a few extra thousand to being financially overextended. Stick to your limit and be patient, you’ll find what’s right for you and your budget in time.
Value vs price
When considering what to pay for a property, consider its value. Make sure you have a clear idea of what a potential property’s value is (as opposed to its selling price) and make an appropriate offer.Back « The beginner's guide to property development
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