Whether you’re a first time home buyer or you’re looking at getting an investment property, the home buyers market can be a time consuming and stressful experience. We’ve put together some ideas on what things you should consider when starting your journey.
Show me the money
In other words, what’s your budget? Your budget will guide the areas you can afford to buy in. While not the case for everyone, the lending market has more recently required a minimum deposit of 20% of amount borrowed. Regardless, the bigger your deposit the more bonuses your lender may provide, and the less you’ll pay in interest in the long term so it’s always a good idea to have more than the minimum. Because of this, it’s best to do your research based on your current or expected deposit.
If you’re finding it hard to get a 20% deposit together, don’t forget there’s government assistance available for some first home buyers. With the Welcome Home Loan scheme, a 10% deposit is all that’s required.
Signing on the dotted line and getting pre-approval
Before you begin your high and low search for the right place to fit your needs, you need to consider all your loan options and get a pre-approval underway. Don’t be too fast to jump into the loan process with the first bank you talk to. You’ll need to invest just as much time shopping around for the right loan as you do for the right house, this is after all the biggest financial commitment you’ll possibly ever make.
Many of the main banks have all the basic information, including loan and repayment calculators available online as a good starting point.
Location location location
When beginning your search it’s best to start online. This is a great first step before you get real estate agents involved, as it gives you a chance to be selective based on your budget and criteria from the comforts of your own home. Primary considerations when beginning the search are:
- The specifications and age of the house. There’s no point in looking at a five bedroom old villa that needs a lot of DIY work (no matter how good of an area it is), if you’re not prepared to put in the time and money into DIY
- The suburb – if you plan on using public transport, is it close to good routes? If you’re a family with young children, are there shops within walking distance? Which schools are in zone?
- If you’re looking at renting out the property – does the suburb have a strong rental market?
After searching online and getting a feel for what suburbs and types of houses you like, get in touch with a real estate agent. They might be able to let you know of new listings before they’re even online! You can also talk to them about the different ways of buying a property – auctions, tenders, process of negotiation and mortgagee sales.
Cost wise, the actual house purchase is the biggest decision when buying a home but you’ll also need to consider and plan for additional expenses which creep up during the buying process. These include builders’ reports, lawyer’s fees and moving-in costs, and once you’ve moved into the property ongoing costs of running and maintaining a home need to be taken into account – house insurance, rates or body corporate fees and any DIY costs if you’re buying a doer upper.
Once you’ve done all the leg work and the planning, it’s time to do the exciting part – going along to open homes and getting your perfect buy. Good luck!