Buying your first home? Five things you need to know
Dec 5, 2016
Buying your first Australian home or apartment is an exciting step in your life, but it also requires a lot of careful planning. You’ll need to save for a deposit, research what you want in a home, arrange your first home loan pre-approval, go to inspections to find your perfect property, bid or negotiate an acceptable price, then go through a number of checks before you can finally become a home owner.A
To help you keep track of the most important things you need to know, we’ve put together this helpful little list.
1. Save for a deposit
The first step to buying a property is saving for a deposit. As a general rule, you will require at least 10% of the purchase price up-front before you are able to buy a home, so decide what price range to aim for and create a savings plan.
In certain cases, it’s possible to purchase with a lower deposit. However, the size of your deposit could impact how much you can borrow, whether you need to take out Lenders Mortgage Insurance, and even your interest rate. The more you can save, the better chance you’ll have at securing a home loan with conditions that better suit you.
There are fees you may have to pay on top of the final sale price, including settlement, legal fees and any other government fees and charges which may apply. Get personalised advice from a Choice Home Loans mortgage broker or your financial advisor, and make sure you include these figures in your calculations when you’re saving for your deposit.
2. Find the right home loan
Once you have your deposit sorted, you’ll need to start organising your first home loan. It’s worth taking the time to do some preliminary budgeting first, and work out how much you’ll be able to afford in repayments based on your income and living costs.
Mortgage brokers can provide advice on a loan that might suit your circumstances. They can also negotiate deals with lenders that might not be available publicly, and manage the buying process for you through to the settlement of your contract. It’s best to look for a mortgage broker who comes personally recommended or is well established locally and can help you shop around for the best deal.
3. Start looking at houses
You may have already started looking at areas where you would like to buy. Once you’re pre-approved for your first home loan, you can shop around for a home that matches what you want and need within your budget.
Consider the condition of the property when making your choice, as well as the proximity to the amenities you might need, such as schools and public transport. If you’re thinking about using the property as an investment, you should also be looking at rental prices in the area to gauge whether you’ll have to make up a portion of the repayments after collecting rent.
4. Organise contracts and building inspections
Once you’ve found your ideal home, make sure to get your contract checked by a conveyancer or solicitor. In most cases, your solicitor or conveyancer can also help you to arrange property inspections to address any safety concerns and check that any legal and regulatory building requirements are in good order, before you make your final purchase.
You, your solicitor or conveyancer should consider getting a licensed builder or surveyor to perform a building and pest inspection. If you’re buying an apartment, it’s also worth doing a strata check, to make sure there are no major building improvements coming up that you will have to pay for.
5. Buy your house
If the property passes these tests and you’re comfortably satisfied with your choice, you’re ready to either make an offer or bid at the auction. If successful, you will need to pay the agreed deposit amount.
The period of settlement – when all the paperwork has been completed and you get the keys to your new place – can vary greatly, and should be agreed prior to purchase. Again, your lawyer or conveyancer will be able to handle this process, as there are other legal checks to go through during the exchange period. A mortgage broker can guide you through what the next steps will be, while explaining any questions you have about the home loan process.
As settlement approaches, you can request one final property inspection to ensure everything as it should be. This is especially recommended if the seller had promised to do any repairs or remove rubbish. Once everything is in good order, you can collect the keys and open the door to your new home!
Get the right advice
If you’re thinking about buying your first home, Choice Home Loans can help you find the right home loan for you. Your qualified mortgage broker can organise pre-approval on your loan so you can start looking at properties as soon as possible.
Take the first step in finding the right home loan with Choice Home Loans. Contact a Choice Home Loans broker today.
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This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the articles is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).