Looking into buying your first property whether that be on your own as an investment or or whether you are buying for your rapidly growing new family, is a definite mixed bag of emotions. On the one hand it is a happy and interesting experience to finally learn firsthand exactly how the property market works as a buyer, and also a time of uncertainty and the sobering realization that you are in fact, finally an adult with responsibilities.
Throughout this process you must be aware of the pitfalls and challenges that you could potentially face. The reason buying property is so complicated is because it fuses the areas of law, finance and property together into one baffling bundle. Check out some of our suggestions for first time buyers.
Be financially realistic
While you may have grand ideas of a multiple bedroom house with enough room for all of your children and everything else you require. The fact is that all of those things will come down to your avenue of finance and often times you will find that it’s better to save those expectations until you have a clear line of finance established. As all that hoping and speculating will do is generate excitement amongst yourself and your family and leave you open to subsequent disappointment if things don’t work out exactly to the plan in your head.
So make sure that you discuss things with either a local bank or ideally, a well reputed home loan broker in your area to ascertain exactly what kind of funds would be potentially available to you. Some lenders borrowing limits can vary as much as $80,000 between Bank A and Bank G. And they all have different lending policies relating to employment, deposit and credit reporting. To find out more about what we could do to help you in this regard please click here.
Buy for the future
Sometimes to enter the market you may be buying a home that you feel like you probably won’t live in for an extended period of time. However, if you are receiving a loan to pay for your new property, chances are that you will be living in it for the next foreseeable 5+ years at least.
So buy a house that not only fits your needs now but is also likely to appreciate in value by the time you are in a position to sell it.
No large renovation jobs on a first buy
Unless you happen to work in the construction industry, are a tradie or have experience at being handy together with some additional savings or resources at your reach – then it’s probably advisable that you forgo this avenue.
First time buyers are very unlikely to effectively plan and execute a large job such as this and may find it difficult to secure the right kind of finance with a lender. Especially if the loan was set up with a small deposit and in mortgage insurance territory.
Painting or some cosmetic changes can be achieved no problems normally – but with structural changes these costs can often blow out.
So keep those larger home renovation dreams under wraps until you are in a better position to realize them fully without any kind of hiccups.