Are you in the market of trying to get your foot into the market?
There’s no doubt that acquiring your very own piece of Australia is an exciting time – but it may also be the biggest financial decision you make.
Venturing into an unknown that is riddled with complicated paperwork, sweat-inducing dollar figures and never-ending choices can leave even the savviest homebuyers too overwhelmed to pay attention to detail when it matters most.
The experts at Together Financial Services are willing to shed some light on the biggest mistakes first homebuyers make – and how you can avoid them.
- First home buyers don’t know what they’re entitled to
Put simply, buying your first home is not the time to fly solo.
Knowledge is power when it comes to purchasing property, so there’s little wonder why most first home buyers make major mistakes when attempting to go up against the big banks to find their home loan.
Even with a vested interest in real estate, most first home buyers are likely to miss basic elements of the process due to lack of knowledge – and unfortunately this can have consequences that can end up costing thousands over the life of a loan.
With continually changing government grants and entitlements, stamp duty, land transfer fees, Lender’s Mortgage Insurance (LMI) and swinging interest rates, borrowers need to be well advised and confident before signing on the dotted line.
Even experienced borrowers know the benefits of engaging an expert mortgage broker to take the guesswork out of the experience.
Plus, using a broker is usually free of charge (as brokers are paid by the lender, not the borrower).
- They fail to seek pre-approval
It might be fun to attend auctions and daydream through display homes, but it can be dangerous territory if you haven’t yet sought pre-approval.
Before you start to research potential homes to buy, make sure that you understand your budget – that is, exactly how much money your lender will let you borrow.
Engaging a mortgage broker will help you know how much cash you have to splash before you browse. A broker will help you understand exactly how the banks view your borrowing capacity, explain any loan fees upfront and the complex process of government grants and how to apply for them.
Keep in mind that you should avoid stretching your budget to the absolute limit, considering you have a new home to furnish and other expenses to budget for such as rates and home insurance.
Tip: It’s worth noting that pre-approvals are typically valid for three to six months, but be sure to double check your timeframe with your broker.
- They don’t understand the value of interest rates
First home buyers should respect interest rates and understand just how important they are to your mortgage.
If you get your interest rate right from the start with the best loan available for you, you’ll actually end up paying less for your home over the life of your loan.
First homebuyers should beware of online comparison websites which are marketing platforms and are designed to attract borrowers through promoted links. Comparison websites aren’t an accurate reflection of your options as they only compare loans from a small group of lenders.
While interest rates and loan terms can seem complex, the good news is that you don’t have to navigate the home buying process alone.
Take the stress out of buying your first home and enjoy the season alongside a qualified mortgage broker from Together Financial Services. Think of our brokers as your own home buying buddy – we’re here to bring you the best deals and share the journey with you!
Get in touch with our friendly finance specialists today and discuss your refinance options by calling (03) 8761 9024 or fill out our short online form for a no-obligation consultation.