Many first home buyers are often overwhelmed with the entire process of acquiring a home loan. However, there are various traps which they often fall for, leading to massive regrets and costly outcomes. To help you identify these traps, here’s the most common mortgage traps for first home buyers that you should avoid:
Not Sticking to the Budget
Buying a house is incredibly exciting, so it can be easy to not think about the long-term ramifications of one’s (often) impulsive decision-making. However, many first home buyers don’t often stick to their budget, meaning they could end up purchasing a house they can’t actually afford. In other words, they tend to overestimate their borrowing power. You can easily avoid this mistake by having your home loan conditionally approved. This means that your loan is confirmed to go ahead when you find the right place.
Assuming that all Lenders and Loans are Similar
Home loans will vary in their terms, features and conditions. Different lenders will offer a vast range of interest rates, upfront costs, associated fees and more. These features are crucial because they will ensure you are able to fulfil your mortgage payments much more easily and quickly over the long run. When trying to find the right home loan, you should do more research beyond the lender you’ve always banked with. That’s why having a mortgage broker can widen your horizons and provide you with more financial options.
Overlooking Upfront Costs
Being a first time buyer means you should not overlook the smallest details in the mortgage acquisition process. Buying a home will obviously come with several upfront costs, such as legal fees, stamp duty and pre-purchase inspections. You can cover these supplementary costs via first home buyer grants and concessions. Alternatively, you can also avoid unpredictable costs by factoring your upfront costs into your budget.
Buying a house for the first time can be a very daunting process. You can combat this anxiety by working with a mortgage broker. Don’t hesitate to get in touch today!