Lynette Murray from financial planning and mortgage advice specialists, ActonAdvice, suggests there are 6 common mistakes to be aware of:
1. Not doing enough research
When looking to buy a property good research is essential. The type of research should include – values research, investment research and financial research. This means you need to work out what’s important to your family – do they need to be close to a school, public transport or where you work? You also need to look at the sales performance and potential of a suburb - is it likely to be the next high growth area? And probably the most important, you need to work out how much you can afford to spend.
When dealing with the financial side of this endeavour, getting the right help and advice from a trusted mortgage broker about a home loan package best suited to your needs is essential.
2. Not getting pre-approval before starting to look
The enthusiasm that comes from the initial decision to buy a property propels new buyers to open houses too soon. Many have had to face the disappointment that comes from finding exactly what they’re looking for and then losing it because they failed to get pre-approved for a home loan.
3. Not investigating a property properly
Falling in love with a property without doing your homework can also lead to some expensive mistakes. Generally, buying a property because you can see its potential can leave you vulnerable in terms of maintenance or renovation cost blowouts unless you do your homework at the beginning and cost these out before you make an offer. When looking at properties consider how well it will age and how it will adapt to your changing needs.
4. Not preparing the paperwork early
Gathering the relevant documentation and completing as much paperwork as possible early on will make the process less stressful as your progress toward the final stages of buying your property. Different stages of the process will require different forms of paperwork so make sure you’re organised and clear about what’s required of you and when. Generally, a mortgage broker can help you with this.
5. Not reading and understanding the fine print
One pitfall those new to the property market often fall into is not making sure they understand the fine print of their home loan package. This is where the additional fees and charges can be found. These extra costs add up over the term of the loan, making it a significant expense that most don’t plan for. If you choose to use a mortgage broker, they will go through these in detail with you, explaining anything you’re not sure about.
6. Not preparing for auction
Many property buyers tend to avoid auctions. Without a proper strategy in place they can be intimidating and stressful events but often some great properties can be found at auction. If the property you want is up for auction it’s important to make sure you’re prepared. Going to an auction with all of the tough decisions already made will make the process much less stressful.
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