Do you have dreams of getting into a home of your own? Do you long for a time when rent inspections, scruffy housemates and the unpredictability leasing are all a distant memory?
It’s not just about convenience and lifestyle either. Owning a home of your own means that instead of wasting money on rent every month, your mortgage repayments are working towards building a valuable asset that can help provide you with financial security and peace of mind.
If your money is going to be paying off a mortgage, it might as well be you who benefits from this process.
The only question is, how do you go about getting into a home of your own? The government provides assistance to first home buyers in the form of the $10,000 first home owners grant, but there’s a lot more you need to know if you want to escape the rental rate race and get into your first home.
Check out the rest of this article to learn more about the 7 things you should know as a first homeowner. Your future, home-owning self with thank you for it!
- Home Loan Eligibility
Unless you have several hundred thousand dollars lying around, you’re going to need a loan to get into your first home. How much you’re able to borrow is the single biggest consideration for first home buyers.
After all, there’s not much point house hunting if you’re not able to get a loan. There are lots of variables that can affect your ability to qualify for a home loan, and your prospective lender will need to get an accurate picture of your current financial situation.
This includes evidence of your income, assets, household budget (including all of your expenses) and existing debts. Making sure you have all the necessary documentation is the vital first step on your path to homeownership.
- Sorting Out Your Finances
Speaking of getting a home loan – banks are always going to look at your finances and assess your ability to meet your repayments.
This includes looking at factors like your income, your credit rating and your debt levels. People that can demonstrate a good savings record, a good credit rating and low levels of personal debt will be looked on a lot more favourably.
Even if you think that you won’t want to buy a home for quite a while, it’s never too early to adopt some good habits and start getting your finances in order. Paying down your debts, building up your savings and keeping up-to-date with any debt repayments are all very good ideas.
- Prioritise Affordability
As a first homeowner, affordability should absolutely be your first priority. By affordability, we’re referring to your ability to keep up with your monthly mortgage repayments.
While it’s tempting to consider other factors like lifestyle, location and house price growth, those will all mean nothing if you default on your loan due to an inability to pay your mortgage.
- Get Into The Market ASAP!
Despite the fact that the housing market in Australia hasn’t been performing especially well over the last few years, industry experts have labelled markets in Australian capital cities as “robust and reliable” over the long term.
There are also significant financial advantages associated with homeownership, especially when it comes to tax benefits. The moral of the story is that it’s much better to get onto the property ladder sooner rather than later, even if these means making some compromises.
Your first home is highly unlikely to be your dream “forever home”, but owning it is an important first step along the road to getting there.
- Get Expert Advice
The title and contract documents involved with purchasing a home can be complicated documents. They cover things like easements and covenants that can have an impact upon your ownership of the property and how you can use it.
That’s why it’s always advisable to get them looked over by a lawyer or conveyancer to ensure that everything is in order. Once you’ve signed them it’s too late to change anything, so getting some expert advice can save you from a very, very expensive mistake.
- Understand The Sales Process
There’s more than one way to purchase your first home. Learn about the two most common methods – auction and private sale – find out how they work in your state and assess which method will serve you best.
You need to make sure that you properly understand the process as well as what your rights and responsibilities are.
- Be Prepared To Strike While The Iron’s Hot
It’s highly advisable to have your finance approved and your deposit saved before you start looking for your first home. This means that you’ll be able to swoop in with an offer as soon as you’ve found what you’re looking for.
You don’t want to be in the position of being beaten to the punch by your competition while you wait for finance approval or to save enough for a deposit.
So, there you have it. There’s a lot to get your head around as a first homeowner, but as long as you keep these 7 things in mind then you’ll be a lot closer to achieving your dream.