5 things to know if you’re in the market for the first time

04th Jan, 2024 | Articles, First Home Buyer

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If property is on your mind, or even a goal for 2024, the obvious question to answer is: what should you know as a first home buyer? Find out!

Whether you’ve come out of the holiday period feeling inspired, or, you’ve just FINALLY had time to actually think about you and where you’re headed, it makes sense to do some research so you can start planning that new home feeling.

If property is on your mind, or even a goal for 2024, the obvious question to answer is: what should you know as a first home buyer?

1. It’s important to do your research and plan early on.

You need to know about yourself and the area you plan to buy in going in.

Identify your key priorities. Is this property a home or an investment? Are there any parameters that aren’t negotiable? (Like where you need to live or how many bedrooms you need?)

Do a real and honest evaluation of your finances and your budget. If you don’t have a budget, put one together so you can calculate how much you’d need to put away each month to reach your required deposit. It will also help you work out how much you can truly afford to make in repayments each month (ideally, this should not be more than 30% of your after-tax salary) and help you get ready to hand over any required information to your lender. As you go, identify ways to remove any debt and improve your credit score.

Find out how to increase your borrowing capacity

Know your borrowing capacity. You’ll need to have a basic idea of how much you can borrow early on so you’re not wasting time on options that don’t fit your budget. Look at your wage, costs etc and start using the borrowing calculators out there to get a clearer idea of what’s possible.

Do your property research. Research homes or investment properties in the location you need, look at recent trends in the area and research the types of homes you can likely afford.

2. There are many ways to buy a home – it’s not just getting that 20% deposit

There are many different ways to organise a home loan and you may find a way to get into that new home sooner with a little research – so if you’re struggling to get that home deposit sorted, get researching, there’s options out there.

For example, are you going to be buying alone? As a couple or with a co-investor? With a guarantor? This will change the attributes a lender will look for, the grants available to support your purchase, what fees may apply to you (such as LMI – Lenders Mortgage Insurance), and what conditions the purchase will place on you and anyone else involved in the purchase, so it’s important to be clear before you get further down the track.

3. There are a variety of loan types and buyers grants available

Different loan options work for different purchasers and a grant might bring that home purchase a lot closer.

Do you want a fixed-rate, variable-rate or split loan? Which lenders offer loans to borrowers in your situation or profession?

It’s important to check out the various grants that can help you get a home. They’re out there for a reason and it makes complete sense to make sure you take advantage of them. These assistance schemes offer financial support such as reducing your deposit requirement or removing your stamp duty.

Contacting a lending specialist like a mortgage broker can help with all of this if you haven’t already been working with one.

4. There will be fees and costs involved beyond the purchase price

Get familiar with the costs that are associated with buying a property. The deposit is a big deal, but there’s so much more to budget for.

This includes the more upfront costs, such as stamp duty and LMI, but you’ll also need to consider any fees you might need to pay with each application.

You’ll also need to consider the cost of any property inspections you might need to carry out on potential properties before purchase.

Then there’s the ongoing costs of home ownership such as rates and utilities.

5. There are a variety of professionals involved in the purchase of a home

The lender and real estate agent might seem obvious but there are others.

Solicitors or conveyancers handle the legal aspects involved in purchasing a home. They ensure peace of mind and protect your interests throughout the transaction.

A mortgage broker works with you and the lenders to find the best loan available. They liaise with the lender and conveyancers to complete the purchase and assist you through the process. They are optional, but the best part is they usually provide all this professional support for free! Which is fantastic if you’re new to the market.

Learn how a broker can help you in your property journey

Finally, before committing to a purchase, you’ll want to conduct thorough property inspections. Engage professionals to inspect the property for any structural issues, potential repairs, or maintenance needs. Understanding the condition of the property beforehand will prevent unexpected expenses down the line and ensure that you’re making an informed decision.

Taking those first steps

Buying your first home can be an overwhelming experience, but with the right knowledge and guidance, it can also be incredibly rewarding.

2024 should see further shifts, bringing a lot of potential to the property market, so it makes sense to get ready.

Use these tips to get you started and trust in the process – you can get into the property market!

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