Common home buying mistakes that are completely avoidable
29 September 2017 MO'R Mortgage Options
Buying a new home is not something you do everyday and it’s completely natural to feel overwhelmed by the process.
You might feel completely at ease perusing the new listings on allhomes.com.au each week, but as soon as you spot one in real life you actually like, your heart beats a little bit faster and your stress levels rise ever-so-slightly.
Can I make an offer yet? How much should I offer? Do I have enough in savings? What about my current house?
It’s ok, we’re here to help.
To start you off, we’ve compiled a list of rules for you to follow. These rules will help you to avoid making the common mistakes people make when buying a new home.
Follow these rules to reduce the risk of: missing out on a property; increasing financial pressure; having sleepless nights, or not getting your loan approved.
1. Don’t arrange finance at the last minute
Please don’t wait to find out how much you can borrow two days before an auction you want to bid at! Lenders don’t always work as fast as we would like. It can take some time for your application to be assessed before you get the ‘green-light’ to bid at auction.
If you’ve gone to the effort of setting up property alerts and you get excited on Thursday mornings, it’s time to consider your finance options. The sooner you know what a lender will allow you to borrow, the sooner you can start seriously hunting for your new home.
There may be things you need to do before buying a new property – for example, restructure your existing loans to release equity or find out whether you need to sell your current home. The sooner you know what options are available and which lenders can best help you, the stronger your position as a buyer.
2. Understand how your decision affects your capacity to borrow
If you’re a few months away from buying a house, you need to understand how your decision to take out a new car loan or start a new job now, may affect your ability to borrow money later. These events can significantly affect your ability to secure a loan approval and in some cases, it will prevent you from borrowing altogether.
If you’re not sure whether something will affect your future borrowing position, talk to us before you make the decision to go ahead. In the current environment where lending criteria is getting tighter, sometimes the smallest things can make a difference.
3. Know what you want and where you want it
“I’m looking for an apartment, or maybe a house. I’m not sure whether it needs to have an outdoor area though. I’m also open to buying in Weston Creek, Belconnen or maybe even Tuggeranong.”
Um, do you actually know what type of property you’re looking for?!
Whilst it’s good to be flexible with your property search, don’t be too vague about what you’re looking for. Otherwise you’ll be looking at every property in every suburb, and you’re going to feel worn out pretty quickly. Being clear about what you want also means you can narrow your research area in terms of analysing past sales data. Being an expert in a few suburbs and knowing what properties are selling for in these locations, means you’ll be better positioned when it comes to negotiate on price.
4. Don’t do it all yourself
There are professionals to help you. A good conveyancer will carefully review contracts to ensure everything is in order before you sign on the dotted line.
Likewise, we can help you manage the finance side of things. Not only can we save you time and money, but by managing everything from the start all the way through to the day you pick up your keys, we’ll save you a significant amount of stress and sleepless nights. With the right support, buying a new house can actually be fun!
5. Keep going (and be open to options)
When you’re trying to find a house that ticks a lot of boxes, be prepared for it to take a while. You want a property that suits your lifestyle in the area you want, but for a price you can actually afford.
As long as you’re open to options that may help you get into a new home (i.e. using lenders mortgage insurance, a family guarantee, purchasing with a family member, rent-vesting, purchasing something less than what you originally wanted, or selling your existing home first), you’ll be complaining about packing another moving box sooner than you think!