Finance

Five Mistakes Nearly All First Home Buyers Make

1. NOT SPEAKING WITH AN INDEPENDENT MORTGAGE BROKER BEFORE YOU GO HOUSE HUNTING

Hear me out, I know it sounds like a sales pitch, but it’s not!

More than 60% of all home loans are now facilitated through independent Mortgage Brokers in Brisbane. This is because so many people realise, they need the best tailored home loan advice for their specific situation.  

When you go direct to a bank/lender the team member assisting you may very well do their best to give you the best deal, but………. they can only give you an option within their own suite of products, and if you don’t quite fit their policies, which some deals don’t, you may find yourself with a decline, which is then marked on your credit file as an enquiry. Your Mortgage brokers in Brisbane won’t do that.  They will sit with you and carry out a full needs analysis, listening carefully. And noting what is important to you, your future goals and plans. You should never apply for any loan product unless you have good reason to be confident it will be approved.   This matters!  Here is why.

NO ONE LENDER HAS ACCESS TO MOST PRODUCTS :

A lender can only offer you the best option they have for you.  Your Mortgage brokers in Brisbane can look across an entire panel of 40 plus lenders and hundreds of products to ensure you have access to the most suitable product for your circumstances and that your application meets the criteria, before any application is made or enquiry to your credit file. You need to protect your credit file and while one enquiry that doesn’t become a credit facility is not the end of the world; having multiple unnecessary enquiries can set you back months or even years if a lender is concerned.

FULLY ASSESSED PRE-APPROVAL VS APPROVAL IN PRINCIPLE :

Talk to us about the difference between these. Only a fully assessed pre-approval is truly useful, the other is often just an indication of your current borrowing capacity.

YOU DON’T NEED 20% DEPOSIT :

It’s great to have a large deposit but sometimes trying to come up with 20% can leave you constantly chasing your tail as prices continue to go up, so does the amount required to save 20%. Talk to us, we can explain Lenders Mortgage Insurance, First Homeowner’s Grant and all the Government assistance packages out there. We will help you calculate which programs you qualify for and assist you in any way we can. You may not have to pay Lenders Mortgage Insurance, ask us how to qualify.

UNDERSTANDING GENUINE SAVINGS :

Each lender has a criterion for determining what is genuine savings. Sometimes you can even use the rent you have paid through an agent for the last 12 months to assist you in meeting the genuine savings clause.  Each lender has their own policy so talk to us about this before assuming that you don’t have the required “genuine savings”.

SO MANY THINGS TO CONSIDER:

Your Mortgage Brokers in Brisbane will talk you through planning for extra costs and help you to understand ALL the costs involved in purchasing, so there are no surprises.  They will consider your future circumstances based on your goals and plans.  This is critical to ensure that you don’t find yourself struggling to stay in front if you are planning a family, a break from work and make sure you are ready to deal with interest rates rise.  

We will discuss leaving a contingency buffer, not using all your savings, any Government assistance programs you may qualify for, loan structure so that you can pay extra, be ready for your next project should you have one. It also discourage you from borrowing to your maximum borrowing capacity.  We do this every day, we are committed to ensuring it is an exciting process for you and goes smoothly. Contact us now for a no obligation chat on connect@brisbanehl.com.au. 

 

2. NOT SEEKING LEGAL ADVICE

After you have spoken with your home loan expert at Brisbane Home Loans, they will let you know your borrowing capacity and when you are ready to go house hunting.  The next person in your team should be your Conveyancer/Solicitor. You may already have a family solicitor but if you don’t, ask us.  We work with them regularly.  Let them know that you are purchasing and ask for a quote to do your conveyancing including searches and to advise you on Stamp/Transfer Duty. 

Be sure to mention that you will need them to look over the contract before signing and provide you with advice about any important clauses they think should be included.  Your conveyancer will advise you about any easements on the property and the boundaries.  They will let you know if there is any unapproved buildings via searches.  Your conveyancer will provide you with valuable advice to ensure you know precisely what you are buying and that the contract runs smoothly.  They will stay on top of inspection, finance and settlement dates and let you know what you need to do to satisfy any conditions. Ask at what point you become responsible for insurance. In Queensland the purchaser is usually expected to take out adequate building insurance by 5pm the next business day after signing a contract to purchase.

3. NOT SHOPPING AROUND

This has become easier in past weeks due to the property market slowing and that looks to continue for a little while. 

 DO YOUR HOMEWORK ON THE SUBURB :

You need to narrow down the area that you are wanting to purchase and research those suburbs. If you cast your net too wide, you will struggle to have a sound knowledge of local values.  Write yourself a list of everything that is important to you.  Public transport, facilities, schools, commute distance, distance from family, socio economic information, crime stats and anything else that matters to you.  Everyone has a different criterion but knowing that you will be happy living in that area before making offers is a great start.  Here are a couple of sites that offer free information. https://www.propertyvalue.com.au/suburb/paddington-4064-qld  SUBURB PROFILE

https://www.walkscore.com/AU-QLD/Brisbane – WALK SCORE SHOWS, WHAT IS AROUND A SPECIFIC ADDRESS

VIEW LOTS OF PROPERTIES :

Everyone knows about Domain and Realestate.com.au but not everyone remembers to look in the SOLD section.  Finding a house you like may be the easy part, however, knowing what houses in your chosen area have recently sold for is incredibly valuable.  Paying too much for a property can really put you on the back foot and I don’t mean a few thousand.  Sometimes people pay 50 or even a 100 thousand more than a property is worth, just because they loved the house and that was the listing price.

If you are buying for the long term, overpaying by a few thousand probably won’t make a lot of difference, but overpaying by a lot can really hurt.  It can mean you lose out when you sell or your home doesn’t value up when you want to top up to do renovations etc. Brisbane Home Loans has access to RP Data/CoreLogic property reports.  We are very happy to provide these to you at no cost, usually $40 each.  If you are looking at purchasing and would like a property report, please fill in the form here and we will send  the report.   We have a turnaround of two hours during business hours but we will also do our best to get them to you on weekends if you request but no promises.

ONLY VISITING THE PROPERTY ONCE AT OPEN :

We never see all we need to see in one viewing and that is even harder to do when there are other people looking too.  It’s prudent to visit at least twice and preferably, three times if possible.  The first time to see if you think you can short list it, the second time, make notes and then after thinking it through at home, come back a third time with a list of all the things you missed and still want to see. If you’re planning on doing improvements, you could even bring your tradie back with you for their opinion. Viewing the property a number of times at different times of day will provide you with information on traffic, noise, the light in different rooms at different times of day etc.

4. MISUNDERSTANDING WHO THE SELLING AGENT WORKS FOR.  

The only time an agent works for the purchaser is if they are a buyer’s agent.  The agent who lists the property for sale is the seller’s agent and works directly for them.  It is their job to sell the house for the maximum achievable price in the shortest amount of time.  Don’t share too much information with them, no matter how nice they are 😊.  It is their job to find out how much money you can spend, how much you like the house and work the deal for the vendor.  The more they do that, the better they are at their job.  Whatever you do, don’t tell them your maximum budget.  All they need to know is that you are credit ready.  Let them know you have spoken with a Mortgage brokers in Brisbane, you know your borrowing capacity and are pre-qualified.  

5. NOT DOING YOUR RESEARCH

Buying your first home is exciting, it’s what dreams are made of.  It is one of the most exciting and yet stressful times for all of us.  When you start the hunt for your first home, these are a few things you should know before signing on the dotted line.

RESALE VALUE :

As per earlier advice, shop around, ask us for a property report, check sold prices and see what the house last sold for. You can become a suburb expert within a week or two of research, allowing you to feel very confident that you have a solid understanding of current values in a specific area. Having this information will help you make realistic offers that are within the ballpark when you find a house you love.  Find out what plans there are for the suburb, join the local Facebook group to see what is happening and whether this suburb is likely to be up and coming.

DON’T RELY ON ONLINE CALCULATORS :

These calculators are just a generic guide.  While they will provide you with a rough estimate of your borrowing capacity, they cannot consider your personal circumstances.  Your expert mortgage brokers in Brisbane will carry out detailed servicing and provide you with an accurate borrowing capacity that you can rely on when making offers.

EMOTIONS GETTING THE BETTER OF YOU :

Do your best to keep a level head.  Make notes, don’t pay too much, don’t let FOMO cause you to rush and make a decision you will regret.  Everyone says it because it’s true.  For many people this is the biggest financial transaction you will ever make. Take your time and don’t let anyone rush you.  Even if you love the house, there will always be another one if you are unable to secure this one at a reasonable price and with fair and achievable contract conditions.

HOT TIP

HAVE A MONTHLY BUDGET AND STICK TO IT :

Taking control of your finances and knowing where everything is going and how you can improve, is very empowering. Small tweaks in different areas can make all the difference to meeting your goals.  It may just be one of the most important tasks you can master to secure your financial future.

THE BOTTOM LINE

This is an exciting chapter in your life; you want to enjoy it and for it to be a financially sound decision too.  Take your time, do your preparation so that when you go on this journey, you have the information you need to succeed. It’s never too early to start preparations.  If you are in the process of getting credit ready to purchase your first home, call us.  We would love to help.  We work with First home buyers every day, assisting first home buyer’s with their first home is one of our favourite things to do.  Ask us about joining our First Home Buyer’s group on 07 3889 9250.

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