What are the best tips for first-time home buyers?
Here’s how to plan to buy your first home.
We see many first home buyers who skip over the fundamentals and go straight to the fun part—inspecting houses for sale. But crossing your T’s and dotting your I’s is crucial for ensuring your new home is the right fit.
Here, we round up the best tips for first-home buyers who are ready to take the plunge into home ownership. From ensuring your deposit and loan approval is ready, to getting solid building inspections and conveyancing checks done, pay attention to these top tips to make sure your first purchase is a positive move.
1. Get your affairs in order
The first step in buying a home is getting on top of your deposit and investigating a mortgage.
Be mindful of offers of five per cent deposits as it’s likely your mortgage broker will charge you Lenders Mortgage Insurance which will cost you more on top of your interest rate—which may not be too good itself if you only have a small deposit.
That’s why having a larger deposit is preferred by all parties. Aim for 20% and only borrow what you need for the property and other associated costs, not what the bank is willing to lend you—often a rather large sum.
Make sure you consider the additional costs of purchasing a home too, from solicitor fees to conveyancing costs, transfer fees and pest inspections. Some mortgage brokers may get commissions from the lenders and may even charge you a fee too so be wary of any hidden costs when looking for a home loan.
And remember, pre-approval of a loan doesn’t guarantee you the money, or the loan.
2. Don’t buy above your budget
Seasoned buyers who invest in real estate will agree, this is a common mistake that young investors and first home buyers make.
Consider what you can really afford for your first home. Carefully think about the property type, location and price and weigh up what your future plans are.
By the same token, it’s worth considering that commuting can cost and if it’s an older home then there may be considerable updating and maintenance costs. Weigh these factors up when you’re thinking of putting in an offer. Sometimes it’s better to pay more initially for a property that is better suited and presented.
It’s also worth noting that the first home buyers grant may help bring the principal cost down, so it’s worth investigating how to apply for, and how the first home owners grant works.
3. Do your checks and balances
We can’t emphasise the importance of employing the services of qualified and diligent building and pest inspectors.
Like any large purchase, do your checks and balances and find out if there are any costly repairs or issues associated with your dream home. Otherwise it can quickly turn into a nightmare.
Don’t just inspect the structure of the property, we recommend looking closer at the fixtures and appliances. Is the gas hot water unit in good shape and will the dishwasher and oven work properly? These kinds of repairs and upgrades can be costly and will really put a dent in your budget.
Do some research on the area. Pound the pavement and find out about future developments and plans in the area.
Will changes make the area more desirable or negatively affect it? Check in on any planning permits and for beachside suburbs, find out if there’s any weather events or changing environment that may impact the area.
Look into auction results to see if the asking price is fair. Likewise, if you’re making your first real estate investment and don’t plan on living in your first home, it may be worth looking interstate. For example, real estate in Melbourne may be less expensive or competitive than the Sydney market.
Though it’s your first foot on the property ladder, don’t be afraid to negotiate with the real estate agent. And always find a quality conveyancer.
4 . Speak to a property specialist
It’s a good idea to get expert advice when it comes to a large purchase like a home. That’s why we’d suggest talking to a property specialist about your budget, location, and key considerations.
That way with clear information, the property specialist will be able to provide you with the best options for your real estate needs. After all, asking for help isn’t always a bad thing. The more knowledge you have, the better equipped you’ll be to the right house for the best price.
Keep in mind that these tips go for both buying or building a new home.
So take note on how to prepare to buy your first home and stay tuned as we delve deeper into more information for first home buyers.
30 November 2020 News