Before you decide to purchase your first home, there are a number of things to consider. Your personal circumstances, financial situation and housing goals all play a part in the buying journey. Whilst getting a foot in the property market door can seem challenging, with the right advice and a little commitment, it can be done.
I spoke with Business Development Managers from major lenders and asked them what their top tips were for first home buyers. Here’s what the industry experts had to say…
1. Research:
Research potential properties.
Keep an eye on property prices in the areas you are interested, read up on property prices in the newspaper or online and scour online real estate guides to get an idea for property prices. Not only will this help you to budget, it will also help you know when you’ve found a good deal.
Tanya, Heritage Bank
Don’t get tied down to one suburb.
Decide which side of the city you want to live in, and how far out you are prepared to live. Draw a loop around this area, and back into the city. Attend all the open houses in this area in your price range – you may find an absolute gem in a suburb you didn’t expect!
Eliza, Liberty Financial
Purchasing an older property?
Have it checked out for things like rising damp, termites, not requiring restumping, and that the overall structure is sound. You can then look at painting, carpeting, etc. to pretty the place up.
Sharon, FAST Lend
2. Set Goals:
Failing to plan is planning to fail.
If you are trying to save for a first home, it pays to look at your spending habits and stop buying items that you don’t need. Set yourself a realistic spending/savings goal and plan ahead for it.
Judah, First Mac
Set a realistic budget.
Understand exactly how much you can afford in repayments after making allowances for living expenses. Speak to your parents to gain a better understanding of household costs; insurance, council rates, water, gas, electricity, etc. Then, include a small buffer for unexpected expenses.
Adrian, On Deck
Understand the cost of loan repayments.
Is it really worth buying the biggest and best house in your favourite suburb? Look at something with repayments more in your budget. You may have to adjust your initial aspirations (i.e. suburb and type of house) however, can still afford your own home without affecting your lifestyle.
Anna, Macquarie
3. Get Your Finances Sorted:
Financial stress is not worth the headache.
Still be able to have a holiday and a bit of a lifestyle. I often see people buying their dream home and then get really frustrated when the bills start coming in and they cannot afford to have a bit of fun.
Sharon, FAST Lend
Ask questions.
"How much can I borrow? How much do I need for my deposit? What is Lenders Mortgage Insurance?
A Finance Broker is there is guide you and assist you with all your questions. They will help you find the right loan to suit your personal circumstances and advise you on your purchase. What you can afford to buy, the deposit you will need, an indication of your Stamp Duty Expense, if you need Lenders Mortgage Insurance and what your Home Loan Repayments will be.
But it doesn’t stop there. A Finance Broker can provide you with a pre-approval so you're confident you can purchase your First Home. We can also make recommendations for other professional services like a Conveyancer or Solicitor and even your Home and Contents Insurance.
Belinda, TMFG
4. Start Now:
Get into the market
Buyers need to remember their first home is not going to be their dream home. But a huge stepping stone to it. My advice is get into the market one way or another as early as you can. If you have chosen the right property, the minute you do, you are already increasing your wealth and opportunity to leverage this for your next purchase.
Sophorn, Riveren Property
So, there you have it. Begin by researching the market, location and types of properties. Set yourself some realistic saving goals and a budget for living expenses and loan repayments. This will give you a better idea of the purchase price you can afford. Ask questions and seek advice from those with experience. A financial specialist can walk you through the buying process from beginning to end, assisting with a loan that best suits your needs. Finally, make a start early. Obtaining your first property, whether it be a home or investment, opens doors for future purchases.