Buying your first home is both exciting and nerve-wracking. It is a major decision that takes planning and research, and careful budgeting. Here are some tips to help you get started.
You are ready to become a homeowner if you have the following things in place:
1). Work out how much you can afford to spend before you even look, and only look at apartments or homes clearly advertised within that price range. Do not waste your energy looking in the wrong suburb — because you may end up biting off more than you can chew.
2). Look at as many properties as possible in your price range to get an idea of what you can afford.
3). If you are worried about interest rate rises, you can split your loan between variable and fixed rates and take an "each-way" bet.
4). Make fortnightly payments, not monthly, thereby saving thousands on the mortgage.
5). Make absolutely sure your home loan repayments do not overly impact on your lifestyle. You do not want to only eat baked beans for dinner for the next 25 years.
6). Be prepared for the monthly repayments to rise and fall during the life of your loan. Make sure there is some financial room to move if rates rise. If rates fall keep paying the same amount each month or fortnight, so you pay off your loan quicker by eating into the principal owing.
7). If you are looking at buying a new home, carry out due diligence and confirm what is included in the total price.
Widen your property search - Not everyone can afford to live in their ideal location. If you're trying to get a foot in the market consider moving out of your comfort zone into an area you may not have considered before. Areas further out from cities or towns can be good value for money and offer a great first step into the market.
Consider a smaller property - If you really want to live in a particular area you may have to start small and work your way up. Consider an apartment or a smaller house that you can add to over time.
Compromise on finishes - Properties that are dated or in need of renovation can be a cheaper option for home buyers. Look for a home that is structurally sound and then clean it to your standard. Add a lick of paint here and there to improve the look and renovate as your budget allows.
Consider renting the property out first - It may be possible to rent the property out first and still receive the First Home Owner’s Grant, provided you move into the property within the first 12 months of settlement. The Office of State Revenue can advise you on this further.