We all dream about the kind of lifestyle we want, but it’s not usually the same as the one we’re living. Make sure you’re clear on what is most important to you, so we can help you work out what type of home that will work with your budget, keeping in mind that your first home starts you on the path to owning your dream home.
It’s important to prioritise your needs. Do you want to be closer to town? Do you need easy access to public transport? Do you need space for a study or gym? Do you want your own bathroom? Is a backyard important? Do you have any pets? Is your family growing?
The steps to buying a house might seem complicated at first—particularly if you’re a home buyer dipping a toe into real estate for the very first time. Between down payments, credit scores, mortgage rates (both fixed-rate and adjustable-rate), property taxes, interest rates, and closing the deal, it’s easy to feel overwhelmed. There’s so much at stake with a first home!
Are you currently renting?
Where to start?
- Assess your Finances – Many home buyers don’t spend the time thinking about and organizing their finances to buy a home until they put an offer on a home. Often they look at house before thinking of anything else. Then they find the house they love. This leaves these buyers scrambling around trying to make decisions under duress and with short timelines. But going about buying your first home this way is unnecessary and backwards.
- Work out your finances – When it comes to home loans, there is a big difference between what you think you can afford and what you can get approval for. That’s why it’s important to get a better understanding of how much you earn and how much you spend. There is a lot to think about when looking at getting into your first home. It’s a big step into the real world, and can be the difference between taking control of your retirement funding now or leaving it until it may be too late. You could be interested in buying a brand-new home, or even building one yourself, in which case you may be eligible for a First Home Owners Grant (FHOG). However, eligibility varies from state to state. Find our if you are eligible by going to speak to a mortgage broker. They will tell you all about the grants that are available and if you are eligible. For example there is a grant for $10,000 for a new home but the value must not be in excess of $750,000 and you have to buy and live in the property. The stamp duty reductions are available to first home buyers when they purchase a new or established property in Victoria with a dutiable value up to $600,000.
- Determine hie much money you have in savings to put towards the purchase – Next figure out how much money you have saved to put towards the purchase of your first home. Don’t forget to have extra cash on hand as a buffer as well, so you don’t deplete your saving down to nothing. By knowing these numbers before you start to look, you will know if you need to save more.
- Review your credit score – Often there can be mistakes in your credit profile that are affecting your credit score as well as there may be things you can do over the next several months to improve your credit.
- Start viewing properties online – While you are assessing your finances don’t be afraid to start viewing homes online as well. This is the time to start setting your housing goals to reality. Often a buyer has a perception of what they can buy when in reality their budget doesn’t fit their initial goal.
- Find a Buyers Advocate – From the time you have the idea to buy a home, keep an eye out for a good Buyers Advocate. While it is not absolutely necessary to use a Buyer’s Advocate it is in your best interest to work with one. Think of a Buyer’s Advocate as a home buying coach that works on your behalf. A Buyer’s Agent will use their extensive experience guiding you through the first time home buying process. They can save you much time, money and aggravation during the purchase of your first home, they walk you through these first steps, if you find one early. It is not unusual for a buyer to start talking to me months before they look at homes.
- Pre approval – Take the time to get pre-approved before getting serious.
The first steps for a first time home buyer can save a lot of stress. Many buyers just view homes and skip some of the critical first steps that help prepare them to buy. Only dealing with financing and finding the appropriate professionals under duress when they have a short time line.
By taking these first steps for first time home buyers you will be ready to start looking at homes with a lot more confidence and certainty. You will have an idea of the market, know with certainty what a house will cost you and already have top notch professional lined up, helping you to prevent costly mistakes from being made.