5 common mistakes to avoid when buying your first home

Getting ready to buy your first home? As your mortgage broker, we’re here to help you every step of the way. It’s an exciting time and it’s easy to make mistakes. Here are 5 common mistakes that you should try to avoid!

1. Relying on advice from family and friends

Family and friends are people you can trust, so it’s understandable that you listen to their advice. However, while they may have the best of intentions, it’s always best to seek independent professional advice when buying a property. Things may have changed a lot since your mum and dad purchased their first home, and your circumstances are likely to be different. They may also have made mistakes without even realising it.

As a first-time buyer, you’ll want a team of experienced professionals in your corner. That means a reputable mortgage broker (like me), a solicitor or conveyancer, plus a building and pest inspector. A good accountant can also be invaluable, particularly if you are self-employed. If you need recommendations, please let me know and I’ll give you a referral.

2. Blowing the budget

The last thing you want is home loan repayments you can’t really afford – you might end up eating baked beans for years to come! That’s why it’s so important to have a solid grasp of your financial situation and budget.

As your mortgage broker, I can help you understand your borrowing power and create a home-buying budget. That will help save time when you start looking for your dream home. I’ll also organise pre-approval on your home loan, so that your finance is ready to go.

3. Underestimating the costs involved

Many first home buyers don’t understand the full costs involved in buying a property. There’s a lot to consider – your deposit, stamp duty, lender fees and charges, solicitors fees, and so on.

Then there are the ongoing costs associated with home ownership. These may include rates, insurance, body corporate fees, maintenance and repairs. Remember, if you need help crunching the numbers, I can assist. I’ll also let you know about any grants or concessions you may be entitled to (like the First Home Owner Grant), which could help get you into your own home sooner.

4. Getting the wrong mortgage

As a first-time buyer, getting your head around all the different home loan products out there can be overwhelming. Offset accounts and redraw facilities. Fixed versus variable rates. Split home loans and lines of credit. It’s enough to give you a head spin! It’s important to choose the mortgage that is most suitable for your needs and saves you as much money as possible.

My role as your mortgage broker is to: 1) understand where you’re at financially and where you want to be; 2) compare the home loan market; 3) find you the right home loan, based on your specific financial circumstances; and 4) walk you through the home loan application process.

5. Being blindsided by emotion

When you’re new to the property hunt, it can be easy to let emotions cloud your judgement. However, try not to let your daydreams get in the way of the facts. Do your research to ensure you’re buying the right property for the right price. If you need help, we can give you some guidance about how to research a property properly to make an informed decision.

With careful planning and support, buying your first home will be a positive experience. As your mortgage broker, I’ll help you every step of the way and can refer you to other professionals whom you can rely on. Please call me – let’s make your home ownership dream a reality!

How To Make A Successful Pre-Auction Offer

With auction clearance rates slipping below 50% in some markets right now, vendors are much more open to a pre-auction offer. You’ll also find more vendors choosing a private sale over an auction because it allows them to hold out for their price and save on auction costs.

That means, if you’re ready to buy a property in the spring market, you’ll also want to be ready to drive a hard bargain. Here’s some tips on how to make a successful pre-auction offer and negotiate your price like a pro.

Offer the right price

Research is always the key to paying the right price for a property. Whether you’re buying at an auction or negotiating directly with the vendor, it pays to know the property’s correct market value before you go in guns blazing.

Research will allow you to make an offer that’s too good for the vendor to pass up, without overpaying. It pays to be realistic – you’ll have a better chance of beating the competition.

Discover the vendor’s motivation

Knowledge is power. Ask the real estate agent why the vendor is selling and use the information to your advantage. For example, if they have already put down their deposit on their next property, the vendor may have time constraints that you could exploit by offering a faster settlement. If they are in a divorce situation, you could offer a larger deposit so that both parties will have more money for their next property deposit. This could help the vendor choose your offer over someone else’s.

Have your finance in place

If you haven’t already done so, ask me to organise pre-approval on your home loan before you put in an offer. That way, you’ll be confident of your finances and have a clear understanding of your upper spending limit. Having pre-approval in place gives you an edge over the competition because the vendor knows the deal will go smoothly.

Play your cards close to your chest

When it comes to liaising with the vendor’s real estate agent, be mindful about giving away too much information. Never tell them your budget in advance, as they could use the information against you. Always indicate that you’re interested in several properties and have other options – if they think you’re too keen on the property they’re selling then they’ll be less flexible during negotiations.

Time your offer well

Timing is crucial when you do make an offer. Some experts suggest that you go in hard and early, well before the auction – as vendors may be more inclined to accept your offer because of the convenience factor. This may also be a good tactic in a softening market.

Others recommend waiting until right before the deadline to make the offer, to eliminate the possibility that the real estate agent will shop your offer around to other prospective buyers.

Another tactic is to stipulate a time limit – for example, tell them it’s only on the table for 48 hours. Whatever your strategy, be prepared to stay firm on your offer – don’t be too quick to budge from your original offer price as it could make you look easy.

Keep your emotions in check

It’s important not to be distracted by your emotions during negotiations. If the price is being pushed up, you may have to walk away if it goes beyond the correct market value you have researched. A common mistake is to be manipulated into paying more than a property is worth because you love the property or don’t want to be the loser in the negotiation process.

Making a winning pre-auction offer comes down to being informed and employing some strategic negotiation tactics. I can help you prepare by organising a pre-approval on your home loan. Give me a call to find out more.

Keep Your Finances Under Control This Silly Season

According to the Australian Bureau of Statistics, Australians splurged a whopping $47.5 billion during last year’s Christmas shopping period. That probably made for a lot of blistered credit cards and debt hangovers come February!

As your credit advisor, I’d like to recommend a more sensible approach to spending this silly season. Here’s a few tips to help you keep things under control. Remember, Santa should be the only one heading south this Christmas, not your finances!

#1 Set a Christmas budget

It’s easy for things to get out of hand when you don’t have a budget. Before you hit the shopping plaza or blaze through the online shopping sites, put together a Christmas budget. Be sure to include the costs of meals, entertainment, gifts and festive wear for your Christmas party circuit. ASIC’s MoneySmart TrackMySPEND app allows you to set spending limits for different categories of Christmas expenses and track your spending as you go.

If you’re planning to travel or book holiday accommodation, you’ll need to factor those costs into your budget too. If you’re planning a big trip with air fares, consider seeing me about a personal loan rather than plonking it on your credit card. It could make it easier to pay off and potentially save you some money on interest.

#2 Know your triggers

To cut back on needless spending, understand the triggers that lead to impulse buying. Maybe you like to do a little late-night online shopping? If so, turn your phone off at dinnertime and leave it in a drawer until morning (don’t forget the alarm though!)

Perhaps you tend to get embroiled in the Christmas shopping frenzy as the big day approaches? Solution: do your shopping early and avoid the last-minute spending rush.

Another tip is to take cash with you to the shops and to leave your credit card at home. That way you won’t be tempted to tap-and-go willy-nilly and get a nasty shock later.

#3 Embrace sentimental gift-giving

A great way to avoid overspending this Christmas is to opt for sentimental gifts rather than extravagant presents that cost the earth. Need inspiration? You could:

Have a family photo taken and give everyone a copy as a gift

Get crafty with handmade gifts, cards and wrapping paper

Bake yummy treats like gingerbread men or mince pies

Shop at markets, op shops and charity sites

Re-gift things to a better home if you have something you don’t need

Make your own redeemable vouchers for tasks like babysitting and massages.

There are heaps of other things you could do to save, so put your thinking cap on and get creative! For any gifts you need to buy, save where you can by purchasing items on sale and by shopping around for the best price.

#4 Suggest a Secret Santa exchange

When you have a big family, gift-giving costs can really add up. Why not suggest a Secret Santa exchange instead? Here’s how it works.

Each family member draws a name out of a hat and buys a gift for that person anonymously. The benefit is you can set a spending limit and everyone receives a gift. You won’t have to fork out hundreds of dollars on presents for multiple people, nor will you have the stress of finding the right gift for difficult aunt Muriel (unless of course you’re unlucky enough to draw her name in the Secret Santa draw).

We hope you have a wonderful festive season and enjoy some quality time with family and friends. After all, that’s what Christmas is really about – not how much you spend.

Remember, I’m here if you need help with a home loan during the holidays, or a personal loan if you want a better way to finance your spending than a credit card. I can also assist with finance for big-ticket items like a new car, family boat, or an overseas trip for example – and help you get it organised quickly. Happy holidays!