July 21, 2017
One of the biggest mistakes home buyers make is in delaying their decision to buy due to misinformation. Those who take advantage of the opportunity as soon as it arises quite often get ahead much quicker than those who don’t. Not getting in at the earliest opportunity could mean you are chasing the market, either waiting to save more or to try to fit one lenders policy. Rachel was told by her bank that she needed to save up another $15k to enter the property market however after speaking with her broker, she realised she could do it now. It meant she didn’t have to wait another 2 years to save up even more and she was in her first home a few months later.
Damien a 28 year old plumber was never comfortable with rejection and avoided it at all costs. When he had moved out of a rental property when he was 21, he had not finalised an electricity bill so a default was listed on his credit file. He knew that banks don’t lend to people with defaults unless he a 20% deposit. Knowing that saving this amount would take his entire life, he put the idea to the back of his mind and on the advice of his parents put his money into a high interest savings account. His parents had never owned a home and it looked like they would be renting throughout their retirement. Once he found the right advisor they put a plan in place and he found himself a home owner within 12 months.
There is always a way to afford the home you want and working with a professional will help you understand how you can do it. If you don't know your options, it harder to make a plan to buy the house you want.
Where does all my money go?
They think the sacrifice to their lifestyle will be too much so they never adjust their spending habits. As a result they see their friends buying homes while they feel like they are missing out. Putting time into understanding your spending habits will help determine where you need to reign in your spending to improve your lifestyle or make a change like growing your family. It can help determine the timeframe you can set to achieving your goals and can speed up the process living a rich and lower stress life. Many issues are caused by money so understanding where it goes is the first step in finding a solution.
I’m too busy!
They think that buying a home is not urgent so they put off finding the time to get advice. As a result, they feel so busy and everything else takes priority and they find themselves always chasing the dream of home ownership.
I don’t need advice
They think they don’t need advice so they begin the process by looking at properties, as a result they end up either with a property that will not meet their requirements for very long or end up paying more than they could have if they had received advice
The right advice is invaluable. Teaming up with someone to hold your hand, educate you and be there to answer any questions you may have will provide comfort leading into the purchase and long afterward. Advice during the planning stage will ensure that you are doing everything in the correct order and making well informed decisions. Start the conversation as soon as you get the idea to buy, even if you don’t plan on doing anything for a while. Once you have a picture of what is possible, it’s just a matter of making it happen.
It will happen…Who needs a plan?
They think only about what’s happening now so they avoid making a plan beyond now, as a result they don’t set a savings plan to buy their first home, pay the loan down, buy an investment property or retire comfortably. One of the responsibilities of being a grown up is to ensure you have plans in place to tackle the ups and downs of life. Things aren’t always going to be rosy and things don’t always come easy but what makes it easy is if you have a plan and consult with your professionals along the way. The sort of events that can really ruin people financially are loss of income, separation of a relationship, and overspending. A decent plan will accommodate these events to ensure you are protecting what you worked so hard for.
Having a plan is the first step toward achieving a result and putting it into action with a trusted partner will get you another step closer
They don’t take action
They think that having the dream will make home ownership a reality so they don’t take action toward putting a savings plan in place or making themselves look good to the lender. As a result they find themselves approaching 40 years old and still renting feeling like they will always have to rent. Whilst Superannuation has now been compulsory for a number of years, it may not be enough by the time you are ready to retire. Comparing a retiring home owner to a retiring renter, there is heavy reliance on government pensions for a renter, with few back up assets to call on in times of need. With rents historically rising every year, retiring without your own home, means you will be subject to rising rents throughout your retirement. If you are currently employed, you will be contributing to your retirement through Superannuation, why not further secure it through home ownership?