Buying a home is for many Australians a rite of passage and a significant milestone. But it can also be an overwhelming process and incredibly challenging if you don’t know where to start. So that you can navigate the home buying process from start to finish, and make informed decisions along the way, we’ve compiled 3 useful tips for first home buyers.
1. Determine how much you have to spend
As a first home buyer, your budget will depend on how much you’ve saved for your deposit and how much you can borrow.
Before you begin your home buying journey, it’s a good idea to go over your finances with a mortgage broker. Even if you don’t have a large deposit saved yet, our brokers can help you determine how much you’ll need to save and advise you on the best way to do that.
Talking to a mortgage broker may also help re-align your expectations with what you can realistically afford. Your ideal suburb or property type may not fit your budget and you may need to start with lower expectations to get a foot onto the property ladder.
As a first home buyer, you may also be eligible for government grants or schemes that could help you buy your first home much sooner. All of these amounts need to be factored in when calculating how much you can spend on a first home.
2. Get pre-approval
Having the bank’s pre-approval means you can buy with confidence up to a pre-approved amount. In an auction situation, it’s crucial you have a pre-approval in place, but it can also be a real advantage if you’re negotiating on price.
Pre-approval means the bank conditionally approves you for a loan before you find a home. Lenders will check that your finances are in order and assess your ability to repay your loan. If they deem you eligible, you’ll be granted a pre-approval to borrow up to a certain amount, usually valid for a fixed period of time. In that time, you’ll need to find a home to buy.
3. Understand what you’ll be paying for
There are a number of other costs associated with buying a home, and many of these can add up to thousands of dollars on top of your mortgage. That’s why it’s important you research what these additional costs are and factor them into your budget.
Things like stamp duty, transfer fees, government fees, building reports, Lenders’ Mortgage Insurance, as well as conveyancing and solicitor’s fees will need to be paid. These all chip into your deposit and reduce the amount you have to put into the purchase of your home.
Lenders mortgage insurance is the cost you pay when you borrow more than 80% of the property’s value. To avoid it, consider saving up at least 20% of the purchase price before you buy.
Legal & conveyancing fees are part of the purchase transaction, paid to a solicitor or conveyancer to help you prepare documentation and deal with the vendor on your behalf.
Stamp duty varies from state to state, though concessions exist for first home buyers in some states. It can be a huge expense.
Building and pest inspections are a must as they help ascertain that the property is in good condition and that no hidden issues can show up later on.
Get expert advice
Are you looking to buy your first home? If you’re one of the many first home buyers in Australia and you need advice around getting into the property market, saving a deposit, or understanding government grants and schemes, contact Mortgage Express.
Our team of experts understand how overwhelming buying a first home can be which is why we’ll walk you through the process from start to finish. Simply complete this online form and one of our brokers in your area will be in touch to discuss further.
Simply complete this form and one of our brokers in your area will be in touch to discuss further.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.