{"id":2639,"date":"2023-04-13T16:25:09","date_gmt":"2023-04-13T16:25:09","guid":{"rendered":"https:\/\/www.nerdwallet.com\/au\/?page_id=2639"},"modified":"2024-04-05T22:05:42","modified_gmt":"2024-04-05T22:05:42","slug":"first-time-home-buyer-tips-to-consider","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/au\/home-loans\/first-time-home-buyer-tips-to-consider","title":{"rendered":"First Home Buyer Tips: 5 Mistakes To Avoid"},"content":{"rendered":"\n

Buying a house<\/a> is the biggest purchase of most Australians\u2019 lives, and the pile of things to consider when doing so is huge. There’s choosing the best home loan<\/a> and finding the right house, as well as the large time commitment and a lot of paperwork. Along the way, it\u2019s easy to get confused and overwhelmed, which can lead to less-than-ideal decisions that you might regret later. This list of first home buyer tips outlines five common mistakes, and how to avoid them.<\/strong><\/p>\n\n\n\n

Mistake #1: Choosing the wrong loan<\/h2>\n\n\n\n

There are literally hundreds of loan products out there. Finding the one that ticks all your boxes can be challenging. Don\u2019t go it alone.<\/p>\n\n\n\n

It\u2019s generally a good idea to talk to either a financial planner or mortgage broker<\/a>. These professional can direct you to the right product based on where you want to live and the sort of debt burden you\u2019re comfortable with. Home loan professionals should also have a much better understanding of factors such as comparison rates<\/a> to guide you through the process.<\/p>\n\n\n\n

Understanding your personal circumstances and how they may change is also key to finding the best mortgage. If, for example, you opt to go for a fixed-term loan<\/a> for up to five years at the outset of your mortgage, you should be aware that your loan will eventually revert to a standard variable rate. At that point, your repayments are likely to go up \u2014 so you’ll need to factor that in. <\/p>\n\n\n\n

Ultimately, your decision should come down to what sort of risk you are comfortable with and how the mortgage can best maximise your return on investment.<\/p>\n\n\n\n

You may feel overwhelmed by all the types of home loans<\/a> available in Australia, but if you prepare a list of questions and prerequisites, it can help you ask the lender better questions so you can make a better final decision. <\/p>\n\n\n\n

Mistake #2: Borrowing beyond your budget<\/h2>\n\n\n\n

One of the biggest mistakes first-time buyers make is borrowing more than they can realistically afford to pay back. Just because a bank is willing to lend you a certain amount doesn\u2019t necessarily mean you should take it.<\/p>\n\n\n\n

When it comes to a mortgage, it\u2019s not just the amount of money you\u2019re borrowing, it\u2019s the sheer size of the commitment you are undertaking. Making regular repayments over decades<\/a> means not only a high level of job stability but the means to keep making repayments if something happens \u2014 like an interest rate increase or sudden job loss  <\/p>\n\n\n\n

That\u2019s why you should do some serious number-crunching to see what amount you really feel comfortable with repaying \u2014 on a monthly basis and over the full loan term.<\/p>\n\n\n\n

\u00bb MORE:<\/strong> How much can I borrow for a home loan?<\/a><\/p>\n\n\n\n

Mistake #3: Underestimating costs<\/h2>\n\n\n\n

Don’t just think about the deposit<\/a> and how you can acquire that amount. You should also factor in a long list of other costs<\/a> associated with obtaining a home loan. <\/p>\n\n\n\n

Then there\u2019s the costs associated with maintaining the home loan once you\u2019ve obtained it, such as strata<\/a> and council rates, maintenance and repairs. Higher interest rates<\/a> also drive your repayments up. An increasing number of homeowners are struggling under the pressure of mortgage stress<\/a>. <\/p>\n\n\n\n

Calculate your monthly repayment<\/a> at a higher percentage point rate to see how this would impact your lifestyle and budget. <\/p>\n\n\n\n

Mistake #4: Not doing your research <\/h2>\n\n\n\n

This is a broad point because it applies to several things to consider when buying a house. <\/p>\n\n\n\n

Neighborhood<\/h3>\n\n\n\n

First and foremost, you need to thoroughly research the area you want to live in. Look at historical price guides for the suburb and what similar properties to the one you want are selling for, so you\u2019re prepared to ask the right questions at open houses. Also, research the area, not just the nice house you\u2019re determined to buy. Make sure it\u2019s where you want to live for the foreseeable future.<\/p>\n\n\n\n

Home loan options and providers<\/h3>\n\n\n\n

Research mortgages as thoroughly as you can with the assistance of professionals to ensure your product is tailored exclusively to your situation. Then take some time to see where you can find the best value for some of the costs related to your mortgage.<\/p>\n\n\n\n

Property title<\/h3>\n\n\n\n

Once you\u2019ve found your property you then need to research the title deeds to ensure there is no debt remaining on the property or any other nasty surprises. Though, your solicitor should unearth anything in the conveyancing process<\/a>. <\/p>\n\n\n\n

Market fluctuations<\/h3>\n\n\n\n

Additionally, it\u2019s important to stay knowledgeable about the property market<\/a> to see what your property is worth for a potential revaluation that could give you greater financial options. Researching the mortgage market will also let you know if there are products out there that are superior to your existing mortgage. <\/p>\n\n\n\n

Mistake #5: Not getting a building and pest inspection<\/h2>\n\n\n\n


Finally, you should always get a building and pest inspection<\/a> if an up-to-date one isn\u2019t readily available. This will ensure there are no defects that could cost you a fortune later down the track. A proper inspection will inform you of the structural condition of the house and anything else that requires attention to make the property livable.<\/p>\n\n\n\n

There should be strata information available if you\u2019re buying an apartment. Building inspections are also often covered in the conveyancing process \u2014 but not always \u2014 so check with your solicitor. <\/p>\n\n\n\n

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\n\t\t\tAbout the Author\t\t<\/h4>\n\n\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t
\n\t\t\t\t\t\n\t\t\t\t\t\tAlan Hartstein<\/strong>\n\t\t\t\t\t<\/a>\n\n\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t

Alan Hartstein has worked in publishing for over 25 years as a writer and editor across broadsheets, tabloids, magazines, trade publications and numerous forms of digital content. Alan was initially…<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\tRead more about Alan Hartstein and explore their articles<\/span>\n\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t<\/div>\n<\/div>\n\n\n\n\t

\n\t\t\t\t\t

\n\t\t\t\tDIVE EVEN DEEPER\t\t\t<\/h4>\n\t\t\n\t\t
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\n
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\n\t\t\t\n\t\t\"How\t<\/a>\n\t\t\t
\n\t\t\t\n

\n\t\n\t\tHow the First Home Owner Grant Can Help You Buy a House\t<\/a>\n<\/h4>\n\n\t
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Here\u2019s what you need to know about the First Home Owners Grant. <\/p>\n\t<\/div>\n\n\t

\n\t\t\t\t
\n\t\t\t\n\t\t\t
\n\t\t\t\t\"\"Amanda Smith<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<\/div>
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\n\t\t\t\n\t\t\"What\t<\/a>\n\t\t\t
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\n\t\n\t\tWhat does ‘under offer’ mean?\t<\/a>\n<\/h4>\n\n\t
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You may come across the term \u2018under offer\u2019 when searching for your home. This means an offer has been accepted, but the property is technically still for sale.<\/p>\n\t<\/div>\n\n\t

\n\t\t\t\t
\n\t\t\t\n\t\t\t
\n\t\t\t\t\"\"Aaron Bell<\/a>Georgia Rose profile photoGeorgia Rose<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<\/div>
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\n\t\t\t\n\t\t\"10\t<\/a>\n\t\t\t
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\n\t\n\t\t10 Questions To Ask Your Mortgage Broker\t<\/a>\n<\/h4>\n\n\t
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A mortgage broker can be a great asset whether you\u2019re a first-time home buyer, looking for an investment property or are thinking about refinancing your existing mortgage. Make sure they\u2019re a good fit for you by asking the right questions.<\/p>\n\t<\/div>\n\n\t

\n\t\t\t\t
\n\t\t\t\n\t\t\t
\n\t\t\t\t\"\"Alan Hartstein<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<\/div>
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\n\t\t\t\n\t\t\"What\t<\/a>\n\t\t\t
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\n\t\n\t\tWhat Is A Sunset Clause?\t<\/a>\n<\/h4>\n\n\t
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A sunset clause can be a helpful protection for both buyer and seller during the purchase of a property.<\/p>\n\t<\/div>\n\n\t

\n\t\t\t\t
\n\t\t\t\n\t\t\t
\n\t\t\t\t\"\"Aaron Bell<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<\/div>\t\t<\/div>\n\t<\/section>\n\n","protected":false},"excerpt":{"rendered":"

Enlisting early help from a lending professional, doing neighbourhood-level research, and factoring ongoing costs into your budget are some key tips for first-time home buyers to consider.<\/p>\n","protected":false},"author":12,"featured_media":2643,"parent":171,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"page-templates\/article-sidebar.php","meta":{"_acf_changed":false,"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":"\"\"","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":"","_nw_pros_cons_block_schema":""},"content-classification":[7],"topic":[272],"cluster":[326],"pp_author":[94],"acf":[],"apple_news_notices":[],"yoast_head":"\nFirst home buyer tips: 5 mistakes to avoid - 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