9 tips all first home buyers should know
Buying your first property can be a daunting task. From knowing how much you can borrow, which you can do with the InfoChoice Home Loan calculator , to determining the area you can best afford to buy in with the InfoChoice Where Can I Afford to Buy Calculator and then taking the first step to taking out a home loan, there are myriad considerations. However, there are a range of other issues to consider as well.
Here are 9 important guidelines that all first homebuyers should consider when buying a property.
1. Examine your finances
A great place to start your property purchase adventure, is by examining your budget and seeing what all your money needs to be put towards. It’s also a good idea to start saving for that deposit. A 20% deposit is the recommended amount to have under your belt, however in many cases you could purchase with a smaller deposit.
2. Consider a pre-approved home loan
You may find yourself in a better position to put in an offer for a home if you have a pre-approved home loan. The majority of banks offer pre-approval for your loan. Being pre-approved means that a lender has agreed to lend you money towards the purchase of your home, but is yet to proceeded to final approval.
3. Property research
You can start researching properties well before you even have a deposit. If you keep an eye on the prices in your area or the suburb you would like to purchase in, you will have a good idea of what is reasonably priced and what is overpriced by the time you are ready to buy.
Get a free copy of InfoChoice Property Report to help with your research.
4. What costs are involved
Keep in mind there is an extensive list of fees and costs involved when purchasing a house. Fees include transfer fees, mortgage registration, legal costs, mortgage application, stamp duty, lenders mortgage insurance, inspection fees, home building and contents insurance, moving charges and connecting utilities.
5. Building inspection
Once you have personally inspected a few homes and have found the one you would like to put an offer in for, organise for a professional building and pest inspection. With a thorough building inspection you will know in advance what the problems are. You can then make an informed decision as to whether or not you want to purchase a home with certain problems, or if its within your budget to fix such problems.
6. Making an offer
When making an offer, go with a firm maximum price in mind but expect to negotiate.
Know your financial situation, scope out the property and surrounding area, and research all competition.
7. Don't feel pressured
As with all sales people, real estate agents know how to apply pressure. They aren’t working for you. They are working for the vendor. They are after the quickest sale at the highest price. If you feel pressured, take a step back. Don’t rush into a massive financial decision like this without considering it objectively.
8. Exchange contracts
When it comes to the paperwork, make sure to enlist the services of a solicitor or conveyancer. Buying a home is one of the biggest financial purchases you will ever make. Entering into a contract for sale can have significant long lasting consequences on your finances. Make sure you know your legal rights
9. What insurance do you need?
You will need to look into different types of insurance products before you take ownership of your new property such as building and contents insurance. Some solicitors suggest making sure you take out interim building and contents insurance that will cover your new home from the time you pay deposit until time of settlement. The vendor should, of course, have their own current insurance in place, but it’s a small amount to pay for peace of mind – just in case some unpredicted destructive incident occurs.
This update is not financial advice. This article is general news and information.
Home Loans: The comparison rates are based on a secured loan amount of $150,000 and a term of 25 years.
Personal Loans: The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless otherwise indicated in the product name with^, in which case, the comparison rate is based on a loan of $10,000 and a term of 3 years. The comparison rates are for unsecured personal loans only for the relevant amounts and terms. The comparison rates for car loans and secured personal loans are for secured loans unless indicated otherwise.
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.
The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements
InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.
The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.