6 First Home Buyer’s Mistakes and How to Avoid Them

January 15, 2021 By: Nfinity Financials0 comments

As a first home buyer, the process of buying a home for yourself can seem very challenging. There are a lot of stories that we may have heard around how buying a house is a long term commitment and a small mistake can trouble you for a long time. Fret not. If you research the home buying process well, you can certainly avoid a lot of pitfalls. Here is the list of 6 mistakes we think a first home buyer may want to avoid:

Not assessing your financial situation

Assessing your income along with liabilities and commitments while taking a home loan can help you in arriving at a loan amount you can afford.

Not researching about the right loan

It’s important to research which of the different kinds of home loans will best suit your needs based on your current as well as future circumstances. The type of home loan would determine how much capital gain you can generate if you ever decide to sell the property.

Not doing enough homework as a first home buyer in property identification

While choosing your home, make sure you do your homework by researching property prices apart from potential capital returns as well as infrastructure in the area.

Not saving on lender’s mortgage insurance

As a First Home Buyer, you need to make a deposit (LVR), to avail a home loan. By making a deposit which is sufficiently large (up to 20% of the property value), you can save thousands of dollars on Lender’s Mortgage Insurance (LMI). LMI is the amount you will need to pay to the bank as insurance on your mortgage (if you deposit up to 5%). You can make the most out of this provision after discussing with your mortgage broker.

Not finding out about Govt grants and schemes available for first home buyer

The federal government has launched grants and schemes for first home buyers. Some of the current grants and schemes by the government are:

• First Home Owners Grant (FHOG),
• Home Builders Grant (HBG),
• First Home Super Saver Scheme (FHSSS), and
• First Home Loan Deposit Scheme (FHLDS)

Apart from the grants by the federal governments, state governments also gave grants and schemes. For example, the New South Wales government is offering an additional grant known as the First Home Buyers Grant – NSW, in addition to concessions on stamp duty for new properties or land.

Knowledge about these programs and leveraging them can help you save tens of thousands over the course of your loan tenure. We at Nfinity Financials can help you in aligning these programmes and leveraging them for maximising your savings.

Not organising a team

Putting together a team consisting of a mortgage broker(s), Solicitor/Settlement
agent/Conveyancer, Accountant (if you an investor) before closing in on a property, would help you in getting an excellent deal for your property while making your experience pleasant and hassle-free.

We hope this article gave you some interesting tips to avoid known pitfalls.