3 Mistakes first buyers make and how to avoid them
Buying your first home is exciting but there is a lot of information to take in, and its easy to get overwhelmed.
Here are 3 common mistakes we see first home buyers making, and how to avoid them.
1. Getting too emotional about a particular house
Buying a house is not a rational exercise, its an emotional process, where you need to decide if you can live somewhere for the long term and its one of the largest things you will pay for. So its easy to fall in love with a house and go a bit nuts trying to make sure you get it.
The solution- make a list of all the criteria for a house (10 max but 3 major and 7 minor), and then rate each house you see, so you can have some objectivity. Then do a pros and cons on the house before you make an offer, and double check your budget to make sure you can afford it.
2. Focusing too much to the rate, not the cost
Often the first question you will be asked by friends when are buying a house is “what rate are you getting”. Its built into our DNA to check. The thing is that the rates are only for a short term. Getting excited about the 7% I got back in 2007, makes no sense 12 years later. But too often we choose a bank we don’t know, based on a rate that will expire, and don’t look at the long term cost or strategy on the loan.
The solution – base your purchase on the house, not the freebies and talk with your adviser about a strategy to pay off the loan and pay less interest in the long term, not focus to the next 2 years.
3. Not taking advice
Mortgages are complicated and you are going to pay back hundreds of thousands in interest, and yet many people put less effort into them than they do when buying a phone. They buy off the person at the bank with no focus to how the products work (not that many bank staff really know as well), the long term costs and if it’s the right move.
The solution – get a good mortgage adviser (not an order taker who does no more than the bank) who will not only help you with making an offer, securing the house, and protecting you and it, but will show you how to use the banks products to pay them less money over the long term, and to have a clear strategy for the long term.
If you want good advice on buying your first home, talk to the DUX team and build a plan to not just get a home but to help you keep it if it hits the fan, and own it faster than the bank wants you to.