Yes, owning a first home has its perks such as stability, investment, and comfort; it is also the single biggest financial commitment most people will make in a lifetime. So, before you decide to purchase your first property there are a number of things to consider, including your current personal circumstances and financial status.
Why do you want to buy a home?
The first thing any first home buyer should think about is the reason why they are buying a home. You should really consider both short-term and long-term reasons. Do you want to live in it or will it be an investment property? This can help determine the kind of loan you apply for and the kind of home you can buy.
Research potential properties and save
You need to know how much you are wanting to spend so you can plan realistic saving goals. For this to happen, you need to know the market. So, do some research on the areas you are wanting to buy in, checking out auction clearance rates and recent sales, as well as price trends in the surrounding area. You can go as far as introducing yourself to potential neighbours which will give you a great opportunity to ask questions about the area and get a feel for the people you could be living alongside in the future.
Factor in other costs involved when saving
Depending on the property you want to purchase, you could have a number of extra costs. So, as soon as you get the chance, ask your broker what other payments you will face. Aside from the purchase price, you may need to pay for things like the solicitor’s costs, building & pest inspection costs, and stamp duty (if you’re ineligible for one of the State Government’s home buyer grants) on your property. Remember that moving house isn’t free either; truck rental, mail redirection, utility, phone and internet connections may also be included.
Think about your future personal and financial circumstance
Just because your current situation allows you to get a home loan, that doesn’t automatically guarantee that you will still be able to service it in five years’ time. Assess your lifestyle, such as your current income and expenses, as well as any future lifestyle changes you envision that could affect your earning potential. Also, make sure you can afford any increases in interest rates. Is there a possibility your role at work will change? Are you considering going back to study and reducing your working hours?
Get professional help
As you can see, there are so many things to consider when buying a property. Going it alone can prove costly so getting professional help as early as possible is highly recommended. You can use various professionals for tasks such as property checks, pest checks, and any other legal queries. By getting the right people to do the appropriate checks for you from the beginning, you can avoid nasty surprises down the track.
Remember, while some lenders will offer loans if you have saved less than the usual 20 percent deposit, being able to show a record of good saving habits will aid in getting your loan approved. Then, talk to us about applying for pre-approval on the right type of loan, we can help you work out what you can afford in terms of repayments.