9 Questions to Ask Before Buying Your First Home

Having your own home is the dream, but planning and making it a reality can be stressful. Ask yourself these 9 questions to see if you’re ready to buy today.

Buying your first home is one of life’s most satisfying and exciting achievements. Be it ever so humble, you can make it your own and remove yourself from the vicissitudes of living in share households or in rental properties.

You’ve been saving tirelessly for the deposit on your first home and feel you could be ready to leap into the property market. Are you really ready? Here are some questions to answer to find out:

1.    Are you eligible for any first home buyer assistance?

Grants for first home buyers and reductions on stamp duty charges can be a huge bonus to help you into the property market. Government assistance for first home buyers vary from State to State, so check what your State Government currently has available in the way of assistance for first home buyers. 

2.    Do you have sufficient saved for a deposit?

Most lenders will require a deposit of 20 per cent of the value of the property you are purchasing in order for you to qualify for a home loan. Some will lend up to 95 per cent of the value of the property but be aware that if you borrow more than 80 per cent, your lender will require that you take out lender mortgage insurance (LMI) which will cost you extra and protects the lender, not you, if you default on your repayments. 

3.    Have you found a mortgage broker?

Have you found a mortgage broker you feel is knowledgeable and trustworthy and will assist you to find the right home loan for your needs? Talking with several mortgage brokers, selecting one you trust and speaking with them in detail about your situation can be a great help in seeing you through the whole process of applying for a home loan. 

4.    Do you have all your paperwork ready?

You will need lots of evidence that can be shown to your lender to prove that you will be comfortably able to service your loan, such as wage statements, tax returns and bank statements. Your mortgage broker will be able to detail for you what is needed in your specific case.

5.    Have you cleaned up your credit history?

The less you owe anyone else, the likelier you are going to be successful in applying for a home loan. Try to pay down any credit card balances, car loans or personal loans as much as possible, before you apply to a lender for a home loan. 

6.    Do you have sufficient savings for all the costs of buying a home?

Even if you are eligible for a first home owner’s grant and/or stamp duty concessions, there are plenty of other costs involved in buying a home, over and above the deposit. These include stamp duty, government charges, mortgage fees, conveyancing costs and costs for building and pest inspections. Extra costs can add up to seven per cent to the final cost of your first home, so be sure to budget for this. 

7.    What repayments can you comfortably afford?

Once you have purchased your first home, you need to be absolutely sure you can make the repayments on your home loan. Be very realistic about this. At the moment, interest rates are at a historic low but they won’t stay that way necessarily. Consider how you would cope if interest rates went up in the next few years. 

8.    Are you planning to move in the next five years?

Buying a house is not a smart idea if you are planning to move within five years or so. The value of the home may not rise enough in that time to cover the costs of selling, moving and buying another home and you could lose money. Buy your first home with the intention of staying put for a few years. 

9.    What can you afford?

If you’ve answered the above questions, then you’ll have a fairly clear idea of what you can afford and can start looking at properties in your price range. You may have had plans to buy a two or three-bedroom house, but may have to look for options in a cheaper neighbourhood or settle for an apartment instead.

If you’ve answered these questions and feel quite confident you are ready to go ahead with buying your first home, then speak to a member of our team today to help you with your first property purchase.

 

First Home Buyers

 

 

 

 

 

 

 

 

Posted by Administrator on 30/11/2016 at 3:30 PM | Categories: First Home Buyers -

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