There’s a lot to consider when buying your first property. Where will I buy, how much will it cost, what will the stamp duty component be, what capital growth will I see? And these are just some of the questions you’ll no doubt have running through your mind.
1. Do your research
It’s important from the outset that you understand the process to obtain your first home loan and what loan capacity you might have, as well as the purchase and settlement process.
It’s also crucial to know the market at the time you’re ready to buy. This will help guide your decision on what areas to look in and what type of property will be affordable. It will also inform your decision on when to purchase, which will make all the difference in your investment now and in the future.
As a first step, sit down with a mortgage broker to discuss your borrowing capacity for your first home loan which will help you determine what areas to consider before you start hunting.
2. When it comes to deposits, plan ahead
Having a solid deposit available will make all the difference in terms of the first home loans you can select from.
Save as much as you can for as long as you need toward your home loan.
To help this process, you may consider decreasing your credit card limits or cancelling them altogether, paying off your car loan or investing more in your savings or super account each month.
Twenty per cent of the purchase price is a good goal to aim toward and saves you from having to pay lenders mortgage insurance.
Consider buying off the plan where a new home purchase may allow first time home buyers to save considerably on stamp duty and also award them with the first homeowners grant from the government.”
3. Don’t be an emotional bidder
Don’t be the person at the auction paying well over the reserve price to secure your first piece of real estate.
The perfect home is a rare thing to come by, especially for first home buyers. Therefore you need to be realistic with what your money can get you and what your budget is.
Know where you would be prepared to make compromises while you’re searching for your new home remembering that appearances can always be changed with your own interpretations and personal touch.
For example, perhaps a two-bedroom will suffice if you have room to build a third down the track. Or consider purchasing further out of the city and facing a longer commute to work. You’ll have more space on your side and possibly a lower mortgage.
You won’t have all the boxes ticked with each home you bid on, but know what your non-negotiables are and work around them.
4. Power your offer
You may find that there are multiple parties interested in the one property. Often, vendors may be willing to accept an offer ahead of a forthcoming auction. To do this, however, the offer needs to be fairly compelling, especially if there are multiple parties involved.
If you find yourself in this situation, you can consider the terms of your offer as a way to put your best foot forward. Vendors are often open to different settlement terms – 30 / 60 / 90 days for example. Power your offer by working through the best scenario that is right for you and the vendor – for example if a property is vacant, consider a quicker settlement period. By having all your finances in place early, you give yourself the best opportunity to secure the first home you want.
5. Think long term
While affordable suburbs may not always be in ‘prime’ locations right now, take future potential into consideration. This includes proximity to public transport, shopping strips, beaches, and parks.
You can find this information by keeping across real estate news, quarterly reports, and forecasts released by data companies and major banks.
Many of today’s hot spots were not as they seemed 10 years ago so take the time to research growth corridors and consider properties that may lead you to an investment in the future.
Speak to Financial Scope Melbourne today about making your first home purchase a breeze.
Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.
Clint Thomasson
Clint has over 14 years experience in Financial Services working with major corporates including NAB, AMP, ANZ, and AXA. With a passion for Mortgage Broking, coupled with his outstanding interpersonal skills, Clint’s drive is all about matching your needs with the right financial solution. Whilst many businesses offer Finance Broking services, the difference you’ll find with Clint is his ability to listen, engage, retain knowledge and accurately match your requirements. Not only that, but he’s also a very friendly and genuine person with a great work ethic – you’ll have full confidence that he will deliver in a timely and highly efficient manner, every time.
