The Biggest Mistakes First Home Buyers Make

Buying your first home is very exciting but the majority of people don’t take into consideration a number of things when buying their first home.

Here is a list of mistakes first home buyers often make when buying a house:

1. They Don't See a Mortgage Lender First

Many first home buyers make the mistake of viewing homes before meeting with a mortgage lender. This can be very disappointing when you have fallen in love with a home but you cannot put a deposit down as you have not applied for finance approval yet.  The key to avoid disappointment and missing out on your dream home is to obtain unconditional loan approval first then you know how much you can afford and you won’t be disappointed when you fall in love with a home.

2. They Settle on the First Loan

First home buyers should shop around when looking for a loan.  Don’t just settle on the first bank that offers you finance.  The more you shop around, the better chance you have to compare and ensure you’re getting a good deal.  It’s worth engaging in a mortgage broker who will be able to search and find the best loan for your circumstances. When looking for the right loan you should take into consideration the rates, lender fees and loan terms.

3. They Push the Budget

First home buyers should think twice when over extending their budget.  Over stretching your budget is easily done when you’ve got your heart set on a home but overextending your budge can lead to regret and worse situations later down the track. It can put you at higher risk of losing your home if you fall on tough financial times. Instead of getting stuck in this situation, first home buyers should focus on what realistic monthly payments you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $400,000 loan, that doesn’t mean you can afford the monthly payments that come with it.  First home buyers need to factor in other day to day expenses when determining how much to spend on a home.

4. They Don't Know the Area

First home buyers need to be happy and comfortable in the area and suburb where they buy their first home.  Finding the right area to live in is important to your life and family development.  First home buyers should make their own enquiries and also ask their real estate agent about neighbourhood crime statistics and school ratings in the areas of interest. Visit the neighbourhood at different times to get a sense of traffic, neighbour interactions and the overall vibe to see if it’s an area that appeals to you. This will ensure that you are comfortable and happy with the area once you’ve moved in; plus you won’t end up living in a neighbourhood that you hate.

5. They Don't Ask a Lawyer

First home buyers should seek legal advice from a solicitor or conveyancer once they have found a home they wish to purchase.  This will ensure that the property is checked out thoroughly with the appropriate searches and inspections undertaken. It will also ensure that the contract is explained to first home buyers so that there are no nasty surprises once you become the owner of the property.

If you have questions about your first property purchase, please contact Lisa Pizzonia at lpizzonia@franklaw.com.au. 

This is not legal advice.