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Reason 1:
Poor account conductFinance is not fully approved until the bank has seen your bank statements. We have had clients conditionally approved who have subsequently been declined when the bank saw their statements. In both instances the client had gone into unarranged overdraft.
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Reason 2:
Looking in the wrong placesA number of first home buyers start their hunt looking at properties (and going to auctions) well above what they can afford. Eventually they get buyer fatigue and start looking in the right price range and areas.
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Reason 3:
Putting offers on the wrong housesIf a place is cheap (and looks good) it is usually because something is wrong with it. Do some basic checks yourself before getting an inspection – look under the floor for dampness or rot and look for repairs.
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Reason 4:
Check everything worksA building inspection will throw up structural issues with a house but will miss the small stuff. It pays to check that everything works – heated towel rails, spa pool, dish washer, dryer, drains, hot water, central heating, fans, and oven.
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Reason 5:
Not allowing for upfront costsYou will have between $1,500 and $3,000 of upfront costs when buying property. Make sure you factor this in to your budget.
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Reason 6:
Under estimating borrowing costsBanks will approve you for more than you can reasonably afford. It is important to have a realistic budget and to plan on higher interest rates. Putting your head in the sand simply creates problems later.
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Reason 7:
Changes in circumstanceIf you are going to have kids, travel overseas, go back to study, or join a hippie commune – work out what that means in advance.
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Reason 8:
Paying the minimumIf you only pay the minimum you will not get ahead and your mortgage costs will increase when rates go up.
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Reason 9:
Choosing the lowest rateThe lowest rate is often not the lowest cost option and if it is a fixed rate it can have hooks and hidden costs.
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Reason 10:
Buying “Interest-free” stuff for the houseOnce you have a mortgage it gets harder to repay other debts. Although a hire purchase might be interest-free (and you might absolutely needed it for your kitchen) at some point it needs to be repaid and will then impact on how easy it is to live with your mortgage.