What First-Time Home Buyers Must Always Do
Buying a home for the first time is nothing short of a nerve-wracking experience, especially if it’s an investment. You need to do your research thoroughly about the property and look into different financing options. Study suggests, however, that some first-time home buyers are not doing enough research.
Last month, commercial banks have increased their variable rates by an average of 18 basis points. This is despite the RBA deciding yet again to leave the cash rate unchanged at 2%. Westpac, CommBank, NAB, ANZ, and other non-major lenders have all hiked their rates out-of-cycle with the RBA, which raised questions about financing options investors can avail.
(Read More: Mortgage Rate Hike — What Happens Next?)
Personal Finance Education
It turns out that not all buyers are aware how this could affect their investing strategy. Recent survey conducted by Mortgage Choice reveals that one in five first-time home buyers don’t know commercial banks can raise their rates independently of the RBA.
Mortgage Choice chief executive John Flavell said that additional education about personal finance could help first-time buyers understand the situation and assess their financing options. “Personal finance isn’t taught as part of the HSC curriculum in any of the states,” he said. “Anyone planning to get their foot on the property ladder needs to understand the role and power financial institutions have on the rise and fall of interest rates.”
Mr Flavell reiterated however that in spite of the rate hikes, home loan rates are still at their lowest. The RBA has also remarked that the impact of the variable rate hikes is minimal and did nothing but to reverse the effects of the cuts this year.
(Read More: Property Market Recap — “Investors Need Not Panic”)
Understanding is Key
A good property investing plan needs solid research. At JDL Strategies, we use the best practices in helping our clients build a smart property portfolio, that includes having an in-depth knowledge of the market and financing options. If you want a good team to help grow your investments and secure your financial future, contact us now.