Buying a house is the biggest, most intimidating decision a person can do in their lifetime.
But before you take the plunge, the most important question is this: what do you really need to buy your first home?
You have probably gone back and forth through the real estate section in the local paper or used apps and browsed websites in search for that dream space — but are you ready to take on the next big step and purchase real estate?
Becoming a first home owner can be daunting and requires your full commitment, so here’s what you need to do before taking that big plunge to buying your first home.
1. Determine Your Budget
Know what price range you can afford to pay for a house while still being able to live comfortably. Unless you were born a millionaire, you would probably need a few months to a few years to be able to pay up front for your house, so make sure to consider that before you decide to go for a higher tier. This could mean that you will have to give up a few indulgences until the house is paid, but just make sure you do not forego even the most basic needs.
2. Save For Your Deposit
Getting a 100 per cent loan is a very rare case and sellers will often ask around five to 20 per cent of the total price. Aside from the actual cost of the house, you will also have to consider saving up for additional expenses such as insurance and strata fees. There really is no magic number when you buy your first home but the best advice is to save as much as you possibly can.
3. Shop For Loans
Before settling for a loan provider, make sure that you have shopped around first. You can ask for information from banks or even family, friends and other reliable sources. Also make sure to check out the local ads in the papers — it is very possible to get some good deals from them. Online lenders often provide quotes from multiple sources so you can compare rates without having to walk away from your computer.
4. Get A Mortgage Broker
The most preferable way to shop for a house, especially for first-time homeowners, is through a mortgage broker. Why? They have the most thorough knowledge when it comes to real estate. So when it comes to finding you a good match in terms of price, location or other preferences, asking for their help is the best and fastest way to buy your first home.
5. Check Out Incentives
Want to save even more money when buying your home? The Australian Government actually offers the First Home Owner Grant (FHOG), a one-off grant for first time owners. Eligibility criteria vary by State or Territory so you might want to check out FHOG Online for further information.
The Department of Housing also provides stamp duty concessions for first-time home buyers. The First Home Owner Rate of Duty is applicable to first-time buyers whose house and land purchase does not exceed $530,000 or whose vacant land purchase does not exceed $400,000.
6. Get Rid of Excess Debt
Signing legal documents when you buy your first home is intimidating enough so make sure that you take away further stress by eliminating your debts. Working towards a comfortable lifestyle on a very tight budget can be very difficult to do, so make sure you rid yourself of any excess debts from loans, credit cards and other miscellaneous expenses before embarking on this huge journey.