Start with a budget
It may sound obvious, but before you start looking you need to know how much you can borrow and what you can afford to repay each month. You’re likely to have a mortgage for the next 20-30 years, so don’t just think about your current circumstances, but also plan for the future. Remember you also need to factor in the one-off costs associated with buying, like stamp duty, legal fees, inspections, insurance and moving costs.
Using a borrowing power calculator to get an idea on how much you can borrow is a great place to start.
Choose the right loan
You’ve got your deposit and now it’s time to get pre-approval on a home loan. Researching the different options to get an understanding of what’s important to you is key and will help you get the best deal. Are you after a fixed, variable or split loan? What are the monthly or annual fees? Is having a redraw facility, an offset account or making extra repayments important to you? The number of different loans can be confusing, but there are home loan products, like a Mortgage Saver, which is a great option for first home buyers. Speak to a home loan specialist to get a better understanding of your options.
Finding the right home is much easier when you go in with realistic expectations.
Your dream home might include three bedrooms, open plan living, and a large backyard all in your favourite beachside suburb. But for most of us, what we want and what we can afford don’t exactly meet. Keep an open mind when viewing properties and know what you’re willing to compromise on. Remember, this is your first home and there will opportunity to add value by renovating or upgrading in the future.
Stay within your limits
Only take on what you can handle. This is really important when it comes to buying your first home. Look at the hidden costs associated with different types of properties. If you’re buying an apartment factor in body corporate fees, or if you’re looking for a renovator, make sure you have the resources to follow through. Think carefully about how much time and money you’re willing and able to put into your home after purchase.
Location, location, location
If you’ve found a great house but it’s in a location you don’t know that well, do your research. Schools, public transport and local amenities are important, but also think about your lifestyle and what living there might look like. Take an afternoon to drive around the area, drop by the local cafe and chat to people to get a sense of the community and see if it’s the right fit. Also contact the local council and your insurer to understand the flood risk in the area before you buy.
Don’t forget to insure