Don’t go overboard with the current low interest rates. Whilst rates are at 49-year lows, remember that they won’t stay at these levels for the long term.
Borrowing to your maximum at this (or any) time is a recipe for disaster. Save a significant deposit – no less than 20% - and budget to make repayments at 2% above the current rates.
Better still, pay your mortgage at this higher rate from the start and build up a buffer that you can use if times get tough financially down the track.
It seems as though everyone wants to know where the next property ‘hot spot’ is going to be where prices are expected to jump giving buyers a financial windfall in the near future. Don't get caught up in the hot spot myth. There is no substitute for thorough research before you buy.
Sure there is no harm in checking out an area if it’s named as a hot spot. If it turns out to be a sound investment then go for it however the majority I have checked out have turned out to be average at best and others could have been better selected by throwing a dart at a map from 20 paces!
If you want to buy real estate well, rule number one is to remember who is working for whom. The selling agent will appear to have your best interests at heart however the truth is what they are really interested in is selling you a property they have for sale and selling yours if you have one to sell.
I believe this sale demonstrates how buyers can easily be influenced by asking prices in any market. The developer was looking for $13.1m for this property and achieved a $12 million dollar sale.
At the moment, I can’t believe how many sub $600,000 properties are selling so close to and above the asking prices – a result we haven’t seen since the buying frenzy in 2002. I speak with dozens of selling agents every week and they can’t believe it either.
I am seeing dozens of first home buyers literally paying 5% or more than they should be as they try to capitalise on the extra $7,000 grant from the government.
