The decision to pursue a home loan is one that requires a great deal of time, focus and research. As there are a million things to consider when you decide to secure a home loan, it’s easy to get caught up in it all, making silly mistakes along the way. Don’t worry, if you’re in the beginner stages of investing, Lendi, Australia’s number 1 online home loan platform, has compiled a list of some of the most common investment home loan mistakes many of us will make.
While working towards being granted an investment home loan can be an exciting process, it’s not uncommon for people to find themselves caught up in it all, and completely neglecting the planning aspect. It is critical to take the time to plan out each step of process. This can include your goals and plans for the future, like budgeting for your child’s education, an upcoming holiday or putting aside money for a comfortable retirement.
You’ll also need a rough plan of how you will make your repayments when the time comes, plus do a fair amount of research to find out what paperwork may be expected of you by your lender.
It’s understandable that investors tend to become a little more emotional when it comes to home loans and purchasing as it will be a permanent or long-term place of residence for someone. You’ll of course want the property to look attractive to potential renters. It’ll also be the space that can involve families or a couple looking to have children so it needs to look and feel the best.
However, allowing your heart to dictate your financial decisions, especially when it comes to investing is dangerous. By following your heart, your ability to make logical and smart decisions will be clouded. It may lead you to pay more, rather than gathering the skill to negotiate a better price in terms of your investment. We all want a great property, we just need to be smart about it.
If you’re thinking to play it smart and buy something cheap, don’t get ahead of yourself too quickly. Take into consideration whether you’ll be able to repair the house on your own, or if you’ll need to hire professionals. Ask yourself if this will be worth it long-term by calculating the amount needed to renovate. Is it worth it? Are you better off waiting for something better to come along? Remember, unless, you’re a skilled and experienced carpenter, plumber or painter, maybe it’s best to just leave it to the pros.
It’s good to be mentally and financially prepared for all the extra costs you can encounter when purchasing a property. This could be stamp duty, inspection costs, moving costs and home insurance. Again, do your research thoroughly and save as much as you possibly can before heading to a lender for a loan. It’ll save you the surprise and shock when the bill arrives.
There’s no denying that buying a property is the biggest financial decision you’ll ever make. It’s also the largest amount of debt you’ll likely find yourself in, so nothing should be left to chance. One of the biggest mistakes you can make when it comes to investing is feeling unclear or unable to comprehend exactly what it is you’re doing.
Look, it's a jungle out there. But, one thing I did right was I started...
Is SMSF Property Investment impossible for the younger generation? For any of...