5 golden rules for buying your first home
Buying a house for the first time is an extremely exciting time and a fantastic milestone for any Australian. Since it’s your first time, it’s perfectly normal not to quite understand how it all works and how to get through the experience smoothly without any hiccups.
There are plenty of ways to buy your first house, but all of them will be just that much easier if you follow these five golden rules.
- Get pre-approval
Before you start shopping for a home, you’ll need to shop for a mortgage. This way, you can track down a lender with a low rate home loan, and discuss with them how much you might be able to borrow considering your current savings, income, expenses and other financial factors. A first home buyers loan can be a huge help in finding a lending option that best suits you, and once you have a good idea of how much you can borrow, you’ll know where you can start looking for a home.
This process is known as pre-approval, and it’s good for more than just giving you an idea of how much of a budget you have for purchase. It also means that when you do find your dream home for just the right price, you’ll be one step ahead with the process and will be able to sooner make an offer.
- Get a professional inspection
Viewing a house can give you a great idea of its feel and atmosphere, but only a professional can do a close enough inspection to check for the smaller, technical side of things.
A property inspector will spend several hours checking the home for everything from rusted pipes and insect damage to ventilation and water proofing. Many companies will let you join them as they carefully examine the property and talk you through any issues they find. The idea is that you will learn about problems long before they become serious issues, as fixing them now can save you financially in the long run. It will also help you decide if the cost of repairs would be too much, and it may help you negotiate the sale price lower if there are areas you’ll need to address upon purchase.
Inspections vary in cost largely depending on the size of the home and therefore the time spent on site.
- Budget for all costs
When you’re looking at what you’ll be able to afford each month, don’t forget to factor in all costs.
This means including insurance payments, any taxes and strata fees, utilities, maintenance costs and repairs. Basically, if you budget just for your mortgage repayments, it means you won’t have much – if anything – left over to cover other ongoing costs involved with home ownership. That’s why it’s important to understand all these fees prior to making an offer.
- Use a real estate agent
A real estate agent will cost more, but he or she will make the entire process significantly more simple.
While you have countless other things you need to get done, he or she lives and breathes the property market, so will know of any homes that are currently on the market that could suit your needs. They are also familiar with the local areas so have insider knowledge on what’s happening nearby, and can help answer the countless questions you will have throughout the process.
- Buy for needs, not wants
Finally, as much as you might want a large home with a sprawling garden, it might not be the best financial decision to aim this high.
Instead, make a list of what you need, taking into account the next 5-10 years and whether you’ll need spare rooms, a space to work from home, or a location that’s close to public transport and schools. Once you find a few options that cover all your needs, then you can start considering which one is best based off your wants.
When it comes time to apply for a home loan, talk to Beyond Bank about the best package for your needs (and wants!).