LEGAL

BMC Law Announces Top Five First-Home Buyer Traps

Wednesday 28 August 2019, 5:08PM
By Beckie Wright
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Wellington property lawyers BMC Law have released a short list of the top five things to look out for as a first-home buyer in NZ. Buying a home is exciting, but one of the most difficult transactions to make in your life. A home is typically the biggest asset a person citizen ever owns. This is why it’s so vital to avoid common pitfalls.

The first mistake many make is choosing the wrong interest rate. Picking a home loan is complicated; there are many factors to consider. For example, do you need a fixed or floating rate? Many circumstances can impact this decision. Furthermore, the lowest rate isn’t always the best, as mortgages can come with hidden fees—having a property lawyer to discuss the pros and cons with can give you that extra reassurance you may need.

 The second common pitfall is forgetting to carry out pre-purchase inspections. Taking the time to look at a home up-close prevents unseen complications, like rot, mould, or drafts. Formal building inspections are also recommended, in order to avoid being caught out by expensive repairs post-purchase.

Not using KiwiSaver or the HomeStart Grant? You should be if you want a good first-home sooner—saving for a deposit takes a long time. First home withdrawals from your KiwiSaver can make the difference between buying now, and waiting another three of four years.

The next common trap is looking in the wrong areas. Often, first home buyers look in suburbs that are further up in the market, out of their price range. In order to get into the home you really want, it’s likely you’ll have to work your way up the ladder first.

Finally, many first-home buyers don’t check their credit record. This is a major part of borrowing from a bank. You should ensure that you understand how your credit history works, and seek advice if you don’t.

Interested in entering the Wellington property market? For help with buying, selling, or to look at Wellington property listings, visit https://www.bmc-law.co.nz/ .