If you’re looking to buy your first home, or even just your next, it’s good to be in the know. Make sure you’ve got these top 5 mistakes that others have made before you right first.
These are all traps you’ll be advised of in our meeting, but before that, have a quick read through this handy guide.
Your credit report.
While most people cringe at the thought of having to get into any nitty gritty about their credit, sadly this is an essential task that often gets put into the too hard basket until it becomes a problem. I recently had a client who always paid his bills on time, and assumed he had a perfect credit score. Right before we were ready to settle on his new loan the lender asked about a default on his account from Telstra way back from 2011.
That will never happen to me? That’s exactly what he’d thought, turns out it was a mistake and was easily rectified, but it added a month to our “Quick” refinance, and caused a lot of stress for the client.
I don’t want you to be that client – so check your credit report frequently. It’s free if you wait the two weeks, and will save you a lot of angst later down the line, when you’re already full to the brim of stress and excitement.
This is a gem, it’s always a great idea to get this organised before you go to an open house and find yourself bidding at an auction! Not all lenders will complete a full credit check when they offer you a preapproval, so make sure you check your credit report, and with the lender to make sure. You’re here to avoid any nasty surprises!
By have a preapproval, you know that you can shop and bid and inspect with confidence, you’ll know your limit, and you’ll know how much everything will cost, before you move in.
You can never do too much of this. We’re not even just talking about the local prices and other places in the area, go to the area, if you’re looking to start a family, make sure you’ll fit everything, there are schools nearby, shops, transport anything that you’ll need.
Chat with neighbours, local shop owners, whoever you can find to make sure you’ve got a proper feel for the neighbourhood. Unlike a rental, it’s a more complex process if you want to move again.
Once you’ve found the ideal neighbourhood, check out the house. In detail. Make sure it’s not going to crumble in the next few years,there are no termites, and if it’s going to need some major works, make sure that’s included in the price you pay and in your budget.
Bring a builder friend around for a look with you, or better still, engage a professional building inspector to help you. If you’re buying an apartment – it’s a handy tip to check the body corporate notes, in case they have major works planned, and to see they do regular maintenance.
Know about the hidden costs.
Education is key and congratulations for getting stuck into it.
A conveyancing solicitor will be required to make settlement run smoothly, they can also be a helpful adviser to check through the property paperwork to ensure there are no nasties coming for you.
Purchase costs, beyond the price of the house, you’ve also got your stamp duty and maybe lenders mortgage insurance. Owning a home is also more expensive than renting, there are council rates to pay, building insurance is a requirement of your mortgage.
There are also other things that pop up when owning that don’t when you rent, like maintenance and body corporate fees. If something goes wrong, you’ll need to arrange the plumber or electrician to come out. Consider something like RACV Home Assist,or make sure your tradie mates are invited to your housewarming, and keep them onside.
All the knowledge in the world couldn’t help you get caught by this one.
When you fall in love with a house, desperate to make it your home and you come across another at the auction who feels the same, it’s crucially important to maintain your cool. You’ve only got preapproval up to a certain level, and you never took a building report out, but you’re sure it’s the one and must have it at all costs.
Sit back, take a breath, and be smart. Buying your first home is not something you should take lightly, so be prepared, and do it right.
You’ll only ever buy your first home once, make it a dream, not a nightmare.
If you want to be bidding at the next auction, you need to get in touch with Matthew – your Burgundy House Broker to learn more on 0416 414 242.