Tips for first home buyers
Stick to your budget
Along with careful planning, comes some serious budgeting. Saving for your deposit means no overseas trips, fewer meals out, and no expensive shopping sprees. Set yourself a savings goal; you’ll need at least 20% of the amount you are borrowing as a deposit. The bigger your deposit, the less you’ll pay in interest over the long term.
Determining up front exactly how much you have to spend helps avoid disappointment down the line. With pre-approval you’ll know how much you can buy for and what you realistically can afford. You may need to adjust your expectations slightly and buy a property in an area you hadn’t considered, something a little smaller than you hoped for, or a do-up that needs some work.
Choosing your home
While your first home may not necessarily be your dream home, it’s an affordable first step on the property ladder. Do your homework – check out property prices online and visit open homes to get a feel for the area you’re considering buying in. Think about the things you absolutely must have - being close to public transport routes, schools and shops in the area, or your office, as well as potential resale value. Remember: compromise is key!
Get good advice
Talk to the real estate agents you meet at open homes, and get them to add you to their databases so you get weekly updates of properties in your price range. Get in touch with a mortgage adviser or mortgage broker to talk finance – they’ll shop around for you and find you the best deal with finance terms that suit your lifestyle.
Auctions can be particularly tough on first home buyers. But as more and more properties are sold under the hammer, it’s vital you get auction wise. Research neighbourhood house sale prices so you have a good idea of what the property is expected to go for. Attend auctions as an observer so you have a clearer understanding of how they proceed. And be prepared for disappointment; it’s not unusual for first home buyers to lose out as houses sold at auction go for considerably more than expected.