Mortgage Broker Reveals Biggest Mistakes First Time Buyers Make


A mortgage broker uncovered the most common mistakes first-time buyers make when buying a home.

Robert Roper, director of Trusted Finance in Perth, told Daily Mail Australia that home buyers often “blindly” look for property without consulting a lender or knowing their maximum credit capacity.

Mr Roper said it is important to determine how much you can afford based on your lifestyle and monthly expenses, and whether having kids will change that in the future.

“It’s so important for first-time home buyers to know how much they can afford to borrow and consider their future goals, which can lead to financial stress,” he said.

In the past few months, Mr. Roper has gained a strong following of more than 22,000 people on TikTok by sharing his trustworthy information in short videos.

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Robert Roper, director of Trusted Finance in Perth (pictured), told Daily Mail Australia that homebuyers often “blindly” look at property without consulting a mortgage lender or knowing their maximum credit capacity

Mistake 1: Failure to research on-site data

Mr Roper said early home buyers tend to put their intentions on specific homes without researching the suburban data.

Given history, up-to-date data and opportunities in an interesting suburb can be helpful in understanding the price range for which homes are typically sold.

Mr Roper suggested doing three to six months of researching the suburb using real estate websites to see how long properties have been in the market and how much the house has sold.

“If you can’t figure out how much a property is selling for online, call the real estate agent directly to inquire – they’re usually more than happy to give the information,” he said.

Mistake 2: Not knowing how much you can afford

Before looking for real estate in the market, it is important to know how much you can afford per week versus what the bank is willing to lend you.

“Just because the bank offers you a $ 800,000 mortgage doesn’t mean you have to borrow the maximum amount,” Roper said.

He added that first-time home buyers are more likely to be “convinced” to reach their maximum creditworthiness or greater due to market competitiveness.

For example, if you know a house has already had multiple bids, you’re more likely to raise your own to place the highest amount.

Before looking for real estate in the market, it is important to know how much you can afford per week versus what the bank is willing to lend you

Before looking for real estate in the market, it is important to know how much you can afford per week versus what the bank is willing to lend you

How can financial stress affect your mental health and wellbeing?

While the bank or a mortgage lender can help you determine how much to borrow based on your annual expenses, it is important to consider how a mortgage can affect your health and wellbeing

Mr. Roper said before buying a property with your maximum credit capacity, think about your future and your goals

Mr. Roper said whether you are single or with a partner, consider whether you want children and how soon you want to start a family

“Having a baby and having a family changes everything financially because a person is often the primary caregiver and has to stop working for a period of time,” he said

“This often places a financial burden on the couple and can affect their mental health.”

Mistake 3: Failure to Contact a Mortgage Broker or Lender

Rather than going straight to the bank to ask how much to borrow to buy a property, Mr. Roper strongly suggested speaking to a mortgage broker who is considering a variety of options.

Mortgage brokers compare several banks and the interest rates to determine which is optimal for the customer.

“Different lenders have different policies, so a mortgage broker will determine which bank is best for you and your goals,” he said.

Mistake 4: not thinking about the future

Mr Roper said whether you’re single or in a relationship, young first time buyers should think about their future, whether they want kids, and how soon you want to start a family.

“Having a baby and having a family changes everything financially because one person is often the primary caregiver and has to stop working for a period,” he said.

“This often places a financial burden on the couple and can affect their mental health.”

For this reason, it is optimal to buy a home with an asking price that is, if possible, below your maximum credit capacity.

It is also worth considering what could happen if real estate in your suburbs falls – as it will degrade the value of your home if you sell it.

Rather than going straight to the bank to ask how much to borrow to buy a property, Mr. Roper strongly suggested speaking to a mortgage broker who is considering a variety of options

Rather than going straight to the bank to ask how much to borrow to buy a property, Mr. Roper strongly suggested speaking to a mortgage broker who is considering a variety of options

Mistake 5: Do not take additional costs into account

In addition to the deposit, buyers also have to pay other costs when buying a property – but this is often forgotten.

These costs include stamp duty, bank charges, shifts, and mortgage insurance for lenders.

Lenders Mortgage Insurance (LMI) is the only fee that can be avoided by prepayment of 20 percent or more.

According to ANZ, the lender’s mortgage insurance protects the lender in the event that the homeowner defaults on the home loan and there is a lack of funds.

Error 6: Do not include construction and pest inspection in your sales contract

Another fatal mistake that can lead to additional costs is not to check whether the property purchase agreement includes a building and pest inspection.

“Most real estate agents do the right thing and always make sure that this factor is included in the contract, but it’s always worth checking,” Roper said.

If the building is not inspected and the building shows defects, the buyer must pay for the damage if he has already signed the contract.

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