Buying your first home is an exciting and significant milestone in your life. While it can be a bit overwhelming, following a few simple steps can help you get on the right track and make the process less intimidating. This guide explains some of the most important things to consider when purchasing your first property.
Work Out Your Budget
Before you start searching for properties, one of the most important things you will need to do is work out your budget. This means reviewing your incomings and outgoings to determine what type of lifestyle you would like to lead, whilst being able to own your first home. We do not live to pay a home loan, so it is important that understanding your preferred lifestyle needs prior to owning your first home is a key consideration. Understanding this will also help you narrow down your search for properties that are within your price range. To help with working out your budget, there are a number of budgeting tools and experts you can speak with to assist with this process, which leads to our next point.
Speak With a Mortgage Broker
Once you have worked out your budget, we recommend speaking with a mortgage broker. Mortgage brokers are experts in their field, with extensive knowledge and understanding of the lending and application process. They are familiar with the different loan products, interest rates, and fees associated with each lender, allowing them to provide you with a customized solution that meets your specific needs and financial situation. A mortgage broker’s advice can be invaluable in helping you navigate the sometimes confusing and complicated home loan process. They can explain the pros and cons of different lenders and loan options, as well as educate and guide you and answer any questions you may have, to help you make an informed decision. They will also provide answers to common questions like, how much can I borrow? Do I have enough money for my deposit? What will my monthly home loan repayments look like? What other costs can I expect as part of the buying process?
Consider Your Property Needs
Before you start looking for properties, you also need to have a clear understanding of what type of property you want. Consider things like your current and future lifestyle needs, the property location, size, associated costs with the property, vicinity to public transport and more. For instance, is this property a stepping stone or is this your forever home? Do you want a property that is move-in ready or one that requires some work? If you’re buying an apartment, are you committed to paying annual body corporate fees? Do you have your ‘must have’ items for your preferred property, are there aspects of a property that are a deal breaker? These are all important considerations when deciding on your future property.
Research the Property Market
Spend time researching the property market in your desired and surrounding suburbs. This will help you determine what properties are available within your budget and what features are essential to you. You can use online real estate websites to view properties and their prices. You can also lean on professionals in your corner for suburb research reports which will include purchase price history and recent sale information.
Get Pre-approved for a Loan
Once you’re confident in understanding your budget, your borrowing capacity, your preferred property and purchase timeline, it may be a good idea to begin the pre-approval process. This process involves speaking with your mortgage broker to finalise your preferred lender and home loan product. Often, having a pre-approval provides buyers with more peace of mind and confidence that a lender has reviewed their financial situation and in principle, are willing to provide them with a home loan to assist with purchase their first home.
Hire a Conveyancer or Solicitor
Prior to attending property inspections and engaging with real estate agents, it is a good idea to engage with a conveyancer or solicitor who specialises in handling the legal aspects of purchasing a property. Part of a conveyancers responsibilities will be to complete research, check legal documents, and review contracts of sale. It is important for you to hire someone you trust and have done extensive research on, or been referred to you by another trusted source.
Attend Inspections
Once you’re feeling confident with your needs and the team you have supporting you, it’s time to start attending some inspections. House inspections will give you an opportunity to thoroughly inspect your preferred properties and identify any issues that may result in additional costs. You should always attend a property prior to making an offer and if possible, have the property inspected by an independent builder and a pest inspector.
Make an Offer and Negotiate
Once you have found a property you like, and there are no issues after completing your due diligence and inspections, it’s time to make an offer. Keeping in mind that the property market in some areas is highly competitive, so it’s essential to position yourself with a strong offer including consideration around purchase conditions and settlement timelines. You should do your best to negotiate with the vendor & real estate agents to ensure the terms of the contract are fair to both parties.
Finalize the Purchase
Once your offer is accepted, you will need to finalize the purchase with the assistance of your mortgage broker, conveyancer and the vendor’s real estate agent. This involves signing your loan contracts and transferring funds to finalise the process. It’s important that your funds are available for the agreed settlement date as per your contract of sale, to ensure there are no issues for you to be able to secure your property. Also, purchase building insurance to cover you in the event the property is damaged.
Move in
You’ve done it! Your first property is now yours, and you can move in. Before you do, make sure you go over the property again to make sure it’s in good condition, so you don’t encounter any issues down the road.
Conclusion
In summary, purchasing your first property can be a bit overwhelming, but with the right preparation, guidance and support, it can be a smooth process. Be sure to take your time, consider your needs, research the market, and work with professionals to help make the best decisions for you. Remember, this is a significant investment in your future so don’t be afraid to ask questions and take all the necessary steps to ensure you’re making the best decision for you. A Mortgage broker can help a first home buyer get from A to Z.
