With first home buyers finding it harder than ever to break into the housing market, it’s important to have a general plan before you start looking through property listings.
Things like understanding the market in your desired area and knowing your budget will go a long way in helping fulfil your dream of owning a home, without getting you locked into unaffordable, stressful home loan repayments.
Here are Choice Home Loans’ tips on how to finally break into the property market.
Work out how much you can afford to borrow
While it might be exciting to look at property listings straight away, the first thing you really need to consider is how much you can afford to borrow. Talk with a Choice Home Loans mortgage broker about your options and see if you can get pre-approval on a mortgage. This way you’ll know exactly what your budget is when you’re shopping around.
A general rule of thumb is that your mortgage repayments shouldn’t be more than around 30% of your take-home income. While banks consider your income and expenses, it’s not uncommon for them to offer you a loan that is more than you can comfortably afford. Do your own calculations to make sure you’ll have more than a dollar to your name after your mortgage repayments are made.
Know what you want and where to find it
When you know what you can afford, you can start narrowing down the properties you want to look at. Research your preferred local market, but also look at growth in suburbs where prices have yet to hit their peak.
Once you’ve settled on a suburb, compare previous sale prices in that area, to make sure you’re not paying a price that is at the top of the market. Your Choice Home Loans mortgage broker can get you up-to-date market reports on your favourite locations, tracking average sale prices and comparing them to past years.
When choosing a location, it’s good to consider things like access to public transport, shopping centres, local parks, schools and childcare facilities, depending on your personal situation. Some areas will cater to different demographics better than others.
Interest rates are just one part of a home loan. It’s important to conduct a thorough home loan comparison to make sure you’re definitely getting the best deal.
Ask about any fees or features included with each loan. A good way to lower costs is by trying to minimise the fees you will need to pay, such as administration fees on any credit or debit cards that come with your loan, or Lender’s Mortgage Insurance. In addition, features like an offset account may help you to keep your interest payments down in the long run.
There are lots of variables to consider aside from the interest rate. A Choice Home Loans mortgage broker can help you compare loans, to find one that best fits your circumstances.
Get the right advice
Talk to a Choice Home Loans mortgage broker about your options if you’re looking at joining the ranks of Australian home owners. Choice Home Loans’ team of brokers have extensive experience in all aspects of the lending market.
Make an appointment online to speak to one of our trusted mortgage brokers today.
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