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SEVEN COSTLY BORROWING BLUNDERS YOU NEED TO AVOID

14-Mar-2017 Blunder #1
Not getting a written loan approval before making an unconditional offer. If you are unable to organise this you can avoid a costly headache by inserting a "subject to finance" clause.  

Blunder #2
Not having your solicitor check the sale and purchase agreement, or at the very least inserting a "subject to solicitors approval "clause in the agreement. A solicitor plays a key role in outlining the buyers obligations, so it's imperative that you have them spell out exactly what you're signing up for.  

Blunder #3
Not exploring all the lending options, or working with a good adviser who will do it for you! Don't make your decisions purely on the best available interest rate. A cheap rate doesn't always mean a cheap loan. There are all sorts of other costs and implications; you need to consider costs over the lifetime of the loan, not just monthly repayments.  Remember, your adviser works with various lenders and knows all about the different lending criteria, which means they are in a great position to advise where your lending is best placed. 

Blunder #4
Misjudging the cost of new builds and renovations. Nine times out of ten you will exceed your building budget - so you need to prepare for this. Allow for unexpected costs, and if possible, try to secure fixed cost contracts from the outset. 

Blunder #5

Not having your insurance sussed prior to settlement. Once the sale has gone unconditional you are legally required to settle on the agreed settlement date, regardless of whether you have insurance cover or not. If you don't have adequate insurances come settlement day then the lender will not advance the funds.  

Blunder #6
Not understanding the tax implications of purchasing a rental property. To find out exactly what the tax requirements are (and any tax benefits you could be privy to) you need to speak with your accountant prior to signing the sale and purchase agreement. 

Blunder #7
Not identifying any GST obligations. For some purchases, such as commercial property, paying GST is mandatory. Often it can only be claimed back once it has been paid, and not all lenders will fund the GST during the interim. It's important you explore all the options.  Team up with a good adviser and you can be confident you'll steer clear of all of these mortgage mishaps. Get in touch with us and we'll make sure you don't make any expensive and emotionally exhausting mistakes.