Big mistakes first home buyers must avoid – 3

Over-extending financially


As I’ve already mentioned, paying too much for a property is generally because of emotion – your emotion that is.

And that is one of the biggest mistakes that first home buyers make because they are so excited about the opportunity of becoming a homeowner they’re thinking with their hearts, and not with their heads.

A strategy to limit the chances of over-extending financially is to have finance pre-approval in place before you begin.

A key part of this is to not borrow too much in the first place by exercising financial discipline.

That means don’t borrow right up to the amount that the bank will give you.

Instead, leave yourself a buffer, because there are always unexpected costs, expenses, and outgoings.

You should use a mortgage broker to help you through the maze of lending options, so you can choose the best loan for your circumstances.

One of the other ways that first-timers over-extend financially is by underestimating renovation costs if they have plans to upgrade their home.

Working with a professional before you buy will help to prevent this from happening of course, too.

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Jason Gwerder
Wednesday, 27 October 2021

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