6 mistakes to avoid when buying your first home

Buying a home is a significant moment in life. It is a thrilling experience in itself, not to mention the process of settling in.

It is important not to be influenced by the flow of things and be lured into some of the common mistakes that people make when buying their first home.

Not giving it enough time

It takes time and effort to prepare when looking to buy your first home. Preparation begins by assessing your financial circumstances and you may also need to think about your family’s requirements including schooling, sports clubs, and access to public transport. Then, take into account personal factors such as future career goals and aspirations – would your new home be good enough to accommodate individual needs and dreams?

If you are a couple, you may wish to consider a growing family and its unique needs. Giving your own unique circumstances sufficient thought and time helps you steer clear of some of the common mistakes in buying your first home.

Check out the neighbourhood

Buying a home is different from buying another asset – when you buy a car, for instance, you buy the ability to travel, you buy freedom, and you buy status. When you buy your home you’re not just buying four walls - you’re also essentially signing up to the surrounding area.

Every locality has its own unique set of characteristics and trends. There are specific qualities of schools, demographic factors, crime levels, access to public transport, traffic congestion, and expansion plans.

Houses bought in a hurry, looking mostly at the investment value, tend to ignore these underlying factors which could affect your home’s future value. It is as important to research the neighbourhood as much as you investigate your property.

Plan your finances

One common mistake is when new homeowners do not go through their finances in sufficient detail. Getting your maths right could set you on the path to having your loan pre-approved.

Think of your personal assets and debts like the balance sheet of a company – count your grantassets and evaluate your liabilities. This is what lenders do when you approach them for home loans.

Mistakes in First Home Owner Grant (FHOG) applications

Eligible new homeowners could get support from state and territory government grants - these vary in amounts based on your state of residence. These grants are usually subject to terms and conditions and caps in terms of purchase prices as well as the amount of grant available for new homeowners.

The conditions imposed as part of these first home owner grants leave scope for mistakes when buying your first home. For instance, some common errors include not making the property the principal place of residence of the applicant or advising when circumstances change, not disclosing the name of your domestic partner or spouse, failure to disclose receipt of a prior grant by the domestic partner or spouse, or purchasing the property in a child’s name while the payments are made by parents.

It is important to seek the right advice and be sure to read through and be clear about the terms and conditions associated with First Home Owner Grant (FHOG) applications to avoid these common mistakes when buying your first home.

Misreading the market

Buying a home warrants sufficient study of the market to pick and choose the right time to purchase a home. However, there is a need for caution in reading too much into market fluctuations.

Sometimes, information available in the media could give out conflicting signals and may not necessarily reflect market realities. You should also be aware of short-term fluctuations that may be different from long-term trends.

One way to see through these fluctuations and conflicting symbols is to be an avid watcher of the housing market. However, if you want to be sure of what to make out of the numerous pieces of information that keep floating around, make the right call and get a Loan Market broker working for you. They can help you make informed purchase decisions.

Overshooting your budget

Budgeting and planning finances are nothing short of arts to practise. However, budgets invariably tend to be overshot, not because of your inability to foresee the future, because you could easily fall in love with your own home.

As you get involved with your own project of looking for a home that you hold close to heart, you could be tempted to upgrade your dream home and extend beyond your budget.

It is important to be aware of and stay within your means, since your borrowing limits would have been fixed by your banks for you to stay within your ability to meet your monthly expenses. Staying within your limits and capacity to pay could protect you from exposing yourself to financial shocks and the downside of economic turmoils.   

Now that you know the do’s and don’ts of buying your first home, make the right call and get a Loan Market broker working for you by calling 13 56 26 or explore our website to get started.