There are four traps to look out for as a first home buyer, according to a local mortgage broker.
A recent blog post by Mayfair Finance Australia’s Andrew Rowlands has outlined the four common traps first home buyers often fall into – and how they can go about avoiding them.
The first, he said, is relying on family and friends for all of the advice.
“Your family and friends are often the first people you turn to for advice. Keep in mind that buying a home is a big decision, and if your family aren’t buying houses every other day, they may not be experts,” Mr Rowlands said.
“In fact, if they are like most Baby Boomers, they may have purchased their house many years ago, and over time, the lending environment has changed a great deal.
“Different people experience different circumstances, so what worked for them may not work for you! While they have your best intentions at heart, it’s always best to seek professional advice.”
The second trap for FHBs to look out for is underestimating the true cost of property ownership, Mr Rowlands said, noting that it’s vital to be both realistic and prepared.
“The last thing you want to do is to fall in love with a future home and find you can’t afford the home loan repayments after all!” he said.
“There’s a lot to consider aside from the price of the property – your deposit, stamp duty, lenders fees and charges, solicitor fees and more. Then there are the ongoing costs, such as rates, insurance, body corporate fees, maintenance and repairs. It’s important that you have a solid grasp of your financial situation and budget.”
Getting a mortgage that doesn’t fit your needs was the third trap flagged by Mr Rowlands.
“All the different home loan products out there can get overwhelming, especially for first home buyers. Offset or redraw accounts? Fixed or variable rates? Line of credit? Split home loan? There’s a lot of decisions to make,” he said.
The fourth and final trap highlighted by Mr Rowlands was letting emotion interfere with the process.
“Buying your first home is exciting, overwhelming and can be stressful all at the same time,” he said.
“It can be easy to let your emotions cloud your judgment, but try not to. Do your research to ensure that you get the right property at the right price.”