Aussie Buyers Admit To Uninformed Decisions

It’s the biggest purchase you will ever make - however, the majority of Aussie home seekers admit that they know little about how the property market even works.

A recent survey conducted by Westpac of more than 1000 homeowners currently in search of their next property revealed the bulk did not understand a variety of key financial concepts and were scrambling to educate themselves.

Almost half survey respondents said they did not know exactly what an offset account was, nor did they fully understand what equity was.

Just over 40 per cent did not understand what it meant to refinance and a similar proportion of prospective buyers admitted they weren’t sure what to do at an auction.

Westpac General Manager of home ownership Will Ranken said a lack of understanding of the market meant home seekers were not making informed decisions.

Auctions remain to be an area where most buyers were in the dark. More than half of those surveyed said auctions “scared” them and they would prefer to purchase by private treaty.

Mr Ranken said the only way buyers could conquer that fear was through research.

“Auctions can be daunting, but again, by doing their homework and being well-prepared, home buyers can feel confident to make the most of current opportunities.”

Make sure you don't fall into this trap! Ensure you do your research, learn as much as you can from the agents you deal with and property professionals.

FINANCIAL CONCEPTS

- Equity: Indicates your financial interest in a property. The equity in a home is the difference between its value and the amount owed on the mortgage.

- Refinancing: The process of taking out a new mortgage to repay an existing loan.

- Offset account: Available on home loans to help reduce the cost of interest payments. The money in a transaction account acts the same as if it were a mortgage account, reducing the balance of the loan on which interest is calculated.

- Bridging loan: A short-term loan to help the buyer finance the purchase of a new home while their current property sells.

This information is presented in a general nature and does not take your objectives, financial situation or needs into account. Always seek professional advice before making any large financial decisions.

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The above information has been sourced from News.com.au with data from Westpac, Australia To read the full article CLICK HERE.