Thursday, June 11, 2009

First Home Buyer Tips from a "Loan Man"

I was looking through a website called Not Good Enough and came across some tips from a user by the name of The Loan Man, giving tips to first home buyers about buying their first home.

1) Work out what you can afford if interest rates go up 2%, and dont be talked into anything above what you can afford.

2) Go to an experienced finance broker, as they will know what each banks lending criteria is. You could go to 8 banks and get knocked back but a good broker should have access to at least 2 banks who could do the deal as described above.

3) I would look for an independent broker, not one who is tied to a real estate agent as I would worry about their agenda, is it to get the loan approved so that the real estate agent sells the house or are they looking looking after the buyers needs to make sure they are not getting over committed.

4) Do you research on all houses in the area before signing a contract on property. Don't rush in.

5) Don't over commit yourself, your first home may not be your dream home, but to make money out of the real estate market you need to get into it. Your dream home will come later.

6) Don't believe everything the real estate salesperson tells you, talk to people who have bought houses before, whether it be parents, friends, work mates etc. Some agents talk crap just to get a sale.

7) Don't rush in just because the grant is expiring, as I feel it will drop back to $7,000 from the current $14,000, but when the grant reduces I feel sales of established houses will reduces and prices may drop even further.

8) Start budgeting now and saving for a deposit as this will open up all the banks to you. Try and save monthly what your monthly home loan payment will be, that way if you can save the money you will know that you can well and truly afford the repayments. If you are paying rent try and save the difference between the rent you pay and the loan repayment.

9) Be cautious and dont believe everything you are told.

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