It’s something that many home buyers can attest to: buying a home for the first time is enough to send you spiralling into a pit of panic.
And to be fair, it can be difficult.
That’s why we’ve broken down our first home buying guide into easy-to-digest sections to help you navigate some of the tricky yet exciting journey to owning your very own home.
Renting vs. Buying
For many, the benefits of buying outweigh the risks and constraints of renting a property, both emotionally and financially. For instance, when renting, the property owners can also sell your rental home out from under your feet with little notice, leaving you unsure of where your next home will be.
From a financial mindset, homeowning just makes sense; your hard-earned money will be paying off and earning equity on your assets instead of somebody else’s – the main difference between mortgage vs. rent – and when it comes time to sell, there’s also a very good chance you’ll make money.
Figure Out Your Home Loan Borrowing Capacity
This is a big one to check off on your buying a house checklist. One of the best tips we can give you is to seek professional advice from a mortgage broker – a good one. In general, they won’t charge you any fees (instead, they’re paid a commission by the home loan lender once the loan settles) and can help you determine exactly what sort of home loan you can afford, what deposit will be required of you, and your monthly mortgage repayments.
Your mortgage broker can also help apply for home loan pre-approval – this allows you to look at and make offers on properties that you know are within your budget, or know how much you can spend on a house and land package.
If you’re after a general idea of a deposit when buying a home for the first time, you’re more than likely looking at a deposit of around 20% of the price of the home, although some lenders will accept deposits as low as 5%.
Look into the First Homeowner Grant
There exists a government grant for first homeowners that will, as of July 1st 2018, contribute $15,000 toward buying or building your first new home, unit or townhouse, as long as the property is valued at less than $750,000. While this means you won’t be able to buy a pre-existing property using the first homeowner grant, it does mean you can put the money toward a brand new build that best suits your aspirations of a home.
Hot tip: In some cases, the first homeowner’s grant can be used as part of your down payment on a home.
Get Your Home Loan
While having a home loan pre-approval is great, it does not 100% guarantee your loan will be approved. If your financial circumstances have changed significantly between pre-approval and home loan application for instance, approval may not be granted.
To boost your chances of having your home loan approved when buying a home for the first time, you’ll need to be able to show your ability to repay your loan, have a decent credit rating, have a strong savings history or financial safety net, and maintain a stable state of employment.
Finding The Right Home
There are no hard-set rules when it comes to choosing the right property outside of sticking to your budget, of course. There are, however, plenty of first home buyer tips out there, one of which is to weigh your must-haves against the things that would be nice to have. If building, look at what is included in your new home build, and determine what extras are most important to you when building or buying a home for the first time.
If buying, you may need to adjust your expectations on which suburb you are going to live in when buying your first home. Living close to the city may seem ideal, but the difference in property or land price can be in excess of $300,000 or more, depending on which suburbs you’re looking at.
Homes closer to the city aren’t always better either – generally, they’re worth so much because of the land they’re on. House and land packages can be a far more affordable option than buying an established home, which can vary widely in price and condition. And while a newly built home may be further from the hustle and bustle of the inner-city lifestyle, you’ll be rewarded with a larger home that can grow with you.
Really, there is no “right home” – just a home that’s right for you. At Domaine Homes, we’re committed to helping you achieve your home ownership goals. Speak to us today