Buying your first home can be a daunting process. Decisions will need to be made that will have a major financial impact on you.
If you don’t have good guidance and feel you don’t know what you’re doing these simple tips will help you.
Should You Buy?
Before you do anything else, workout if buying your first home is right for you. Can you afford it? Does it make sense to own a home right now? Do you want to travel? Could you wait until you are in a better position?
Set a Budget
If you think that buying your first home is the right thing to do, you will then need to work out your budget. As a first-time buyer, this will probably depend on the size of the deposit you can put together and your monthly wage. If you are unsure how big a mortgage you could get, start shopping around online or make an appointment with a good local mortgage adviser.
A great tip I got from Mortgage Broker Joe Tirimacco was this; for one year put aside what it would cost you to service your desired mortgage. If you are paying rent, say $300 per week, and your mortgage will be $500 per week. Set aside each week the extra $200 per week over your rent that you’d need. This will achieve two things;
- show you if you can reasonably afford the mortgage repayments, and
- create an even bigger deposit, if you successfully save the extra $200 per week
Get a Mortgage
In order to get a mortgage, you will need to have a deposit, and you will need to show the mortgage provider that you are in a good financial position to take on the debt. This means you should streamline your expenditures in the months before buying. First home buyers may need to take out mortgage insurance depending on where you live.
Find a House
When buying your first home inspect as many properties as you can and don’t discount any due to location without seeing them. Ask lots of questions and make sure you know whether the property is leasehold, freehold, or strata-titled before you make a move. You should also have a survey (or house inspection) done before you make an offer, to ensure the property is free from any major problems.
Be REALISTIC when buying your first home. We all want a dream home to have a triple car garage, four bedrooms, three baths, two living areas, a gourmet kitchen, and a bonus room. Well, maybe you can afford that but chances are you can’t. Your first home should be what you can afford. Do some repair work, paint, and get creative with home styling. Sell for a good profit and you’ll be well on your way to your dream home.
Make an Offer
If you are confident you’ve found the right place, make an offer. Before doing so, work out how much you are willing to pay, taking into account the asking price, location, and any fixtures and fittings included in the sale. Tell your offer to the estate agent, and don’t be afraid to go in a little low. Unless there is a lot of interest in the property you can usually haggle. Don’t go too low or you could miss out.
When making an offer, you may have to pay a holding or deposit, but this will be returned to you if the deal falls through, so don’t worry.
Arrange Your Mortgage
Ideally, you will already have everything in place when buying your first home including how much you can borrow. Most banks and lending institutions will pre-approve your loan. However, you will still have to finalise the sale paperwork with your mortgage company.
Hire a Conveyancer
Once the mortgage is approved, you absolutely must hire a good conveyancer from a company like Gillard Lawyers, who will take care of all of the legal work involved in transferring the ownership of a property. This is an important step, so don’t be tempted by low-cost options which may not ensure all of the I’s are dotted.
Then, all that remains is to arrange a deposit with your conveyancer, exchange contracts, complete the sale, and move into your new home!