What are some common mistakes first-time homebuyers make?
As a first home buyer, you’ve got quite a lot on your plate. You’re trying to understand your finance options, stay on top of all the new listings, attend as many opens as you can, all whilst managing an already packed work-life schedule.
If you don’t have the right support as a first home buyer, it’s easy to make mistakes. Here are the most common mistakes made by first home buyers, so you can be sure to avoid them.
1. Not Getting Pre-Approved in time: Failing to get pre-approved for a mortgage can lead to disappointment when you find a home you love but are unprepared to make an offer.
It can sometimes take longer than you think to get pre-approved. Please don’t wait until you’ve found a property that’s up to auction in 2 days time, before reaching out to us. You want to give yourself the best chance of being ready.
2. Overextending Financially: Many buyers either purchase a home that stretches them financially, or they don’t adjust their expenditure post buying a property. It’s crucial to consider not just the mortgage payment but also ongoing property maintenance, rates, strata costs etc.
3. Forgetting about Additional Costs of Purchasing: First-time buyers often overlook extra costs – like solicitor fees, stamp duty (if no exceptions apply) and government/ lender application fees. Make sure you’re working with someone who can accurately estimate the total costs involved. You don’t want to get to settlement day and find out you don’t quite have enough.
4. Not taking advantage of (or knowing about) all the incentives available to you as a first home buyer: Most states have incentives available for first home buyers – like waiver/exemptions on stamp duty. It can be tricky to work out what you’re eligible for though. Which is why it pays to have an experienced team assist you with your first home purchase.
5. Not choosing the most suitable/best value lender available: Many first home buyers visit the local branch they have an account with to see how much they can borrow. The thing is, this lender can only offer limited types of loans, which may not be the most suitable or best value around.
Alternatively, increasing numbers of first home buyers are approaching online lenders for a DIY-type loan experience. This can be more problematic because first home buyers aren’t getting the support or trusted advice they need to ensure they’re not putting themselves under financial risk throughout the property buying experience.
6. Skipping the pre-exchange and pre-settlement inspections: Some buyers forgo these inspections because they simply don’t know this is something they’re entitled to conduct.
7. Being Emotionally Driven: Letting emotions dictate your decision can lead to hasty choices. It’s essential to remain objective and consider the long-term implications of your purchase.
7. Neglecting Future Resale Value: First-time buyers sometimes focus solely on their current needs without considering the home’s potential resale value. Factors like location, school districts, and community amenities can impact future resale and therefore should be things you consider when weighing up your buying options.
8. Not Researching Neighbourhoods: Buyers may rush into purchasing a home without thoroughly researching the neighbourhood. Understanding the local market, schools, and amenities is crucial for long-term satisfaction.
9. Making changes to your financial position after pre-approval, but before settlement: Acquiring new debt, making a big purchase, or changing jobs right before settlement, can affect your ability to settle on the purchase you’ve just legally committed to. With the right team supporting you, you’ll know exactly what you can and can’t do leading up to settlement to ensure you don’t put your mortgage approval – and settlement – at risk.
10. Not Seeking Professional Help: Some first-time buyers attempt to navigate the process without the assistance of any professionals (like an experienced mortgage broker for example), which can prove a costly mistake!
If you’re aware of these mistakes and take proactive measures to avoid them, chances are you’ll have a much smoother experience buying your first home. To improve your chances even further, give our team a call today. We’d love to hear from you.
