2 common mistakes First Home Buyers make before real house hunting.
1. NOT getting pre-approval: just knowing you qualify for a home loan is not enough. Before you start searching for properties, you should obtain a pre-approval letter from lender on how much they are willing to lend you.
Benefits of gaining pre-approval:
– Let you buy the property with confidence since it gives you clear guidance on how much money you can borrow
– You will not set yourself up for disappointment if you think you can spend more than your lender agrees to lend you
– It can speed up your mortgage application process, so when you decide on a property, you can access your home loan faster.
– It shows real estate agents and vendors that you are serious about doing a deal, which could make negotiations easier.
– It can be valid for up to 6 months
– Get multiple pre-approvals with different lenders because having multiple can affect your credit rating, as your credit file will show numerous enquiries with different lenders.
– If you are not seriously considering purchasing than you should not seek a pre-approval because unnecessary finance enquiry may negatively impact on your credit rating.
2. Underestimating or not estimating additional costs is a fatal mistake many first-home buyers make and thinking that if they’ve got a $50,000 deposit and a $500,000 home loan they will be able to afford a $550,000 property. The reality is that there are many other costs you should know and budget ahead of time so you won’t be losing sleep when you move into your new home.
Some of the additional costs include:
– Stamp duty
– LMI – Low mortgage insurance (applicable if your loan value is more than 80%)
– Solicitor’s cost
– Home insurance
– Moving costs
– Council rates and water rates
Buying your first home can be quite tricky. That’s why, I am here to be with you every step of the way AND PROTECT YOU FROM MAKING ANY COSTLY MISTAKE!
Contact us to help you avoid any mistake with your first property!