Dawn Courage from Mortgage Choice says sticking to a budget is the way to get into your dream home.
Dawn Courage from Mortgage Choice says sticking to a budget is the way to get into your dream home. Scott Powick

Budgeting for house-buying

TWEED homebuyers have been advised to take note of interest rates and set a realistic budget in order to buy their dream home.

A Mortgage Choice survey has revealed that more than one-quarter of recent homebuyers did not know their home loan’s interest rate and one in every five had taken on significant extra debt within the first two years.

On a brighter note, the survey also found 83% had no regrets about their home purchase.

Mortgage Choice Tweed Heads owner Dawn Courage said homebuyers needed to stick to their budget.

“When people buy their first home they forget to factor in extra costs like new furniture, so after they buy their home they are also going into immediate financial debt,” Ms Courage said.

“It’s also important to be realistic about your expenses and don’t buy a house thinking you will give up everything else. You don’t want to be sitting at home missing out on dinners or going to the movies ... this will just make you miserable.

“My advice is to sit down with a professional to work out a mortgage.”

The survey found 63% of new home owners were making higher than necessary loan repayments and Ms Courage said this was generally a good move.

“If you pay back more interest then you have to during the year you can access it later,” she said.

“You can either decide to collect the extra funds or leave them on your mortgage to get ahead. It’s like a savings account and provides you with a financial buffer.”

Mortgage Choice spokeswoman Kristy Sheppard said Australia had a low mortgage arrears rate and it was likely the current group of buyers would help to maintain this position.

“Almost one in every five recent first home-owners had taken on what they defined as ‘significant’ additional debt within the first two years.

“We can only hope they have factored this into their budget and are paying it off as quickly as possible.”

HOME FACTS

  • Set a realistic lifestyle budget and stick to it.
  • Get help from an expert to explain the ins and outs of your home loan.
  • Factor in extra expenses such as new furniture, appliances and moving costs to avoid going into further debt.
  • Shop around for the best interest rates.
  • 42% of people surveyed said rising rents made owning a property more attractive than renting.
  • Take control of your home loan and don’t be afraid to ask questions.
  • FACT: 26% of people prefer property to the share market


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