It’s a major step - buying your first property, and there’s no shame in learning lessons in life even if they end up costing you.
But what if they didn’t have to? What if you could learn from others’ mistakes and avoid making your own? Losing money due to poor financial choices along the journey of seeking and purchasing a house or vehicle can land you in all kinds of unfortunate circumstances.
You’re already taking out a mortgage, so the last thing you want to do is put yourself in a position where you can’t afford the repayments and end up needing to take out another personal loan simply to cover yourself. You need to be smart and the best way to do that is to stalk the habits and outcomes of all those that have walked this road already. Such helpful tips are invaluable when making those monumental decisions in life.
Things to know before buying a house
1. Don’t simply purchase or invest based on your current situation
If you’re smart, you’ll view your property as a long-term investment. Just because you’re not married, doesn’t mean you should just look for convenience. Keep your business cap on and plan for the time where you may end up selling.
Location is important
When you browse through the houses available online and in pretty-colored pamphlets, always consider the neighborhood where the property is situated. A neighborhood can impact the selling price significantly, so it’s always wise to do your homework at this part of the process. Take into account the nearby amenities and whether there are private schools and good healthcare facilities in the area too. All these elements come into play when it’s time to sell your property.
2. Opt for something that suits your lifestyle
Owning the dream house with the white picket fence, pool, and luscious garden sounds great and is still the dream of many. But is it still necessary when you consider that you could be in for a larger home loan that you can afford to repay when trying to make this dream a reality? It’s important that you look at your lifestyle and decide on the option that matches that the best. Look at your finances and match them to your lifestyle needs. This is the part where being realistic is vital, and always ask yourself if you will be able to maintain the long-term repayments. This is to avoid financial burdens in the future.
3. Do a thorough walkthrough of the house before you sign on the dotted line
It’s so easy to be blindsided by the defects of a house when you’re excited at the prospect of buying it. Try your best to be as objective as possible. Look at the cornices, the paint, the cracks in the tiles, walls and ceilings. Look for mould, aged flooring and anything else that you feel might be a problem for you when you become the new owner. If you feel that you can’t be as objective as you should be and are simply walking around oohing and aahing, then it’s probably a good idea to get a professional involved. They’ll do the walkthrough on your behalf and will spot all the nitty gritty that you've overlooked. Another common thing to do is a pest inspection. The last thing you need is a roach running over your feet in the middle of your first night in your new home!
4. Never rush a big decision
When it comes to real estate, the agents are pushy! Don’t let them push you. You have a responsibility to yourself and your family to make the safest and best decision for everyone for the long-term. Rushing as a result of their pressure is only going to lead to an unexpected problem that you might struggle to get out of financially. One word of advice - breathe. Try your best to believe in the theory that if it’s meant to work out, it will. Borrowing money for a mortgage is not a small decision, so it’s imperative that you are fully aware of what you’re getting into. Make sure your eyes are wide open especially if you're a first time home buyer. There’s time to shop and compare, so look for those deals, they’re out there!
5. Check your finances and make sure you're ready
Owning a home isn’t cheap. Everyone can tell you this little piece of information. So, your pockets ought to have some depth if you want to pay for a mortgage, and truth be told, not many Aussies have deep pockets when it comes to the down payment part of the purchase. 100% home loans are therefore extremely popular in this country.
It’s a good idea to first establish whether or not you are eligible for the loan before you land with your head in the clouds. Preparing for a deposit is one of the biggest parts of the process of a loan agreement. It’s safe to assume that a reasonable deposit would be 20% of the property sale price.
6. Crunch those numbers and know your costs
Once you’ve tackled all the above tips, then next in line is looking at the fees, instalments and costs that form part of the deal. Bear in mind there might be costs that you haven’t even considered yet, such as removal costs, pest inspection reports, and registration fees. Always create a budget and ensure that you review this from time to time,