Hi IM's,
My partner and I are hoping to buy our first home this year, we know how much we are wanting to borrow and how much we can afford in repayments, we were also planing on having a $20,000 deposit for about a $300,000 loan.
Im hoping i can get some helpful advice on mistakes not to make and what to look out for when buying a first home.
4 Replies
Worst house in the best street.
If you are looking for a fixer upper or something that you can eventually make money on consider what will need to be done to the house. The things that add the most value to a home are updating a kitchen, bathroom and street appeal. Maybe go for a house that doesn't have these things so there is room to make a big improvement
Look at HEAPS of different houses including ones that aren't in your budget. You will get a better idea of the value if the house that you are going to buy.
Only buy subject to a building inspection. Be careful with this as the industry isn't regulated and any tradie (who might only have one trade) can pass themselves off as a building inspector. Suss out what qualifications they have, recommendations and how long they've been in the business etc.
Make sure that the house is tested for termites and other nasties.
Think about the needs of your family and also their needs in the future. What works now might not work in the future and vice versa.
Make sure you do your numbers on how much upkeep on the house is. Also in your budget allow for council rates and factor in if you are receiving any rent assistance as that will go (I know it sounds silly but Ive seen friends fall into this trap).
Check if you will need a guarantor or mortgage insurance. There has been a clamp down by mortgage insurance companies refusing to insure people who work full time hours but are who are not classed as permanent employees. Forcing people into needing a guarantor or a much larger deposit.
Look for a house that is structurally sound. Doesn't matter if it needs a lick of paint, or decorating that is easy and cheap to fix. Don't fall for a house that is "dressed" yes it will look lovely before you move into it but does it actually fit your needs. We have seen some beautiful houses, but when you actually looked beyond the dressing there were some huge issues.
Be aware of the extra costs - I am currently building and my loan is about 300,000. I had a 25,000 deposit but then had to come up with another 15,000 for things like lenders morgtage insurance, solicitors fees, stamp duty, etc.
Consider doing the conveyancing your self. It doesn't really save you that much money at all but it gets you really involved in the whole process. Not to mention the achievement you feel when it is all done. After doing all of ours, both the bank and real estate on settlement day, told me they were really stunned at how well I did with it all and how they have seen people doing it for years as their job and still not be as organised as I was. That was the key to it though. Being organised! Staying organised. I can see why most people don't do it them selves but if you love the feeling of looking around at the end of it all and going "wow I did that! " and having that sense of achievement, give it a go!