If you are a first time buyer, here are some terms and advice to help you avoid potential pitfalls and navigate the process.

FOMO (fear of missing out) trap: Auctions are very competitive. The last thing you want to do is to exceed your budget, through fear of missing out. Stick to your finance limit, needs and want list.

Pre-Approval Offer: Many people assume that obtaining a Pre-Approval for a home loan secures the loan. Incorrect!!!! Pre-approvals only assess your desirability as a borrower based on your income, financial history and ability to make loan payments. The amount is only an estimate.

Hidden Costs: some additional costs include :-

Home insurance – It’s best to check out the location for the “risk rating” of theproperty. Some risks may include flood risks, high crime rates, bushfire risk etc.A “high risk” location accordingly has a higher Insurance premium and you would need to budget for that. Also, if the property is in a “high Risk” area, the insurer may not provide Insurance Cover and therefore the Lender may not provide finance as their security is not insurable.

Home Office /Working from Home – You need to check the wording on your Insurance Policy and see if the property is NOT used for business activity.Some insurers advise that if No clients attend the house, the Home Insurance policy will not change. However, if this changes, then you must notify your insurer as your insurance may not be covered.

Other Hidden costs when buying a property include removalists, disbursement adjustments (including water, rates and Owners’ Corporation fees), utilities connection fees, building and pest inspections etc.