The process of buying your first home is a lengthy one, and if you are not heedful, there is a lot that can throw you off the track.
Several complications could delay your purchase or even derail it altogether, from surprise credit checks to low appraisals.
Are you on the search for a new home in Adelaide? Want to make sure your first property purchase goes off without a hitch? Then take steps to avoid these all-too-common-first homebuyer mistakes.
1. Stuck In A Debt Trap
The more debt you have, the less you are able to borrow.
Everyone has different circumstances when it comes to debt. For instance, you could have a student loan, car loan, along with some credit card debts. Not only could this impact your borrowing capacity, but you need to consider adding ongoing debt and your home loan repayments together. Collectively, this will affect your cash flow.
You can always consult with a debt management specialist to know your options.
2. Borrowing The Maximum Amount
When you are in the process of buying your first home in Adelaide, you would not be wrong in considering that it might be a good idea to see how much the bank can lend to you. But this is not all. There is a significant difference between how much a bank can say it can lend to you and how much you can afford.
We always advise our clients to analyse their income and consider how the home loan repayments could impact their current financial situation.
It is an excellent approach to take a step back and look into your monthly expenses. It can give you a clear picture of the difference a home loan could make to your lifestyle.
3. Overlooking The Incentives
SA First Homeowner Grant
The idea of this grant is to help first home buyers. You may be eligible for up to $15000 from the SA government when building a new home. However, you’ll need to meet several conditions to qualify for this grant.
First Home Loan Deposit Scheme (FHLDS)
It enables first home buyers to purchase a home with as little as a 5 per cent deposit and avoid paying Lender’s Mortgage Insurance. This scheme initially launched on January 1st, 2020 and will support up to 10,000 loan applications each year.
Now, FHLDS (New Homes) is extended for 2021-22. It will include an additional 10,000 FHLDS (New Homes) in the scheme from July 1st, 2021, to June 30th, 2022. (Source: nhfic.gov.au)
Not Having An Alternative (or Plan B)
It is always a great idea to keep your alternative(s) handy to know what you would do if things are not panning out the way you expect.
Your circumstances might change unexpectedly where you might not be able to manage the mortgage.
Planning your investments and consulting the first home buyer’s specialist can help you strategize your finances to achieve your great Australian dream.