So you want to buy your first house or apartment… how do you know that you are ready, how do you find the right first home and how do you guarantee that you won’t run into problems? This first homebuyers guide will take you through the tips and tricks to buying your very own property; the great Aussie dream!
A steady savings plan, the odd government bonus or two and a realistic attitude to where and what property you can buy, are the keys to getting on the home ownership bandwagon.
Things to have BEFORE you buy your first home:
- A substantial deposit – The bigger the deposit, the better when you’re saving for a home; whether your first or your fifth. As a rough guide, aim to save around 20% of the purchase price plus enough to cover costs such as lawyers and surveyors.
- A regular savings habit – A solid track record of employment and a history of regular savings in your bank account will make it easier for you to get a home loan and will make repayments less of a shock to your lifestyle.
- Pre-approval for a loan – Compare a few different loans before you decide. Ask your lender for a fact sheet on each home loan so you can compare more easily. Once you pick the loan you’ll know what the repayments will be and how much you can afford to spend on a property.
- Some additional savings – These will act as a buffer if interest rates rise and your repayments increase.
Finding your first home:
There is no point in looking at property outside your price range. As tempting as it is to do a search for properties that tick all your ‘dream home’ boxes you must be realistic about what you can afford. Once you’ve set a price range, identify which suburbs you would like to live in and what you can get for your money within these communities. A one bedroom flat with no car garage in an inner-city precinct may cost you the same as a three-bedroom house a few kilometers out of the CBD. You will then have to determine what you value more – being inner city or preparing for the future with a larger home.
Then comes the fun part: finding the house or unit you want. Take your time and consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs? Can you see investment potential in the property (after all your home is also, down the track, one of your biggest investments)?
Once you have found your new little piece of paradise, arrange for a building and pest inspection and have the contract checked by a conveyor or solicitor before you sign. If you are interested in a property selling at auction, remember that through this process there is no cooling-off period so you need to be sure the property is everything you expect or you may end up forfeiting your deposit.
Buying a home for the first time can feel like a giant leap into the unknown, but there are plenty of things you can do to make sure you don’t fall into a financial abyss. Keep to your budget, put some money aside for emergencies, and take your time to find a place that feels like home. And remember as a first homebuyer it’s ok to ask for advice and help from those who have already gone through the process. With the right advice, your first home will be the stepping stone to bigger and better things, even a complete property portfolio.
