Thinking about buying a new home? It’s a huge investment – and definitely, one where you want everything to be perfect! It’s a big commitment that requires a lot of work, but the happiness of knowing that you’re the owner of your own house is unparalleled – especially in this economy. However, this does not mean that the entire process isn’t nerve-wracking, which is why below we’ve compiled an extensive guide for first-time home buyers:
Analysing mortgage & down payments
It’s highly important to analyse your mortgage and down payment value before you invest in your first property. The real estate market is a pretty daunting place and if you’ve got previous loans (student, vehicle, etc.) that you’re still paying, then your journey would be even more formidable. Therefore, you should thoroughly audit your finances before you take this venture. You’ll need to make a minimum down payment of 5% for buying a property in Australia. You also need to check various banking programs and find the lowest interest rate. Only when you’re sure you can afford everything should you dip your toes in the real estate market.
(Pro tip: you should get private mortgage insurance if your down payment is less than 20%.)
Tips for shopping mortgage and lenders
Here’re a few tips that every first-time home buyer should know:
- You should search for a respectable lender or a mortgage broker when you don’t have all the cash you need.
- Do some thorough research on local programs for down payment assistance.
- Do some research and look for expert suggestions on how best to improve your credit.
- You should also do a mortgage pre-approval so you can know the ratio of interest and principal you’ll need to work for.
- Only when you know all of this, then you can actually hire a good real estate agent. They’ll help you search for properties that suit your budget. Don’t forget to check on some common real estate myths before starting your search.
Understand what you’re getting into
Here’s the thing: you may think that living on rent is expensive, but that doesn’t even hold a candle to how expensive it is to own your own house. This is because when you own a property, you’re the one who’s responsible for maintenance, upkeep, insurance, and taxes. It’s a lot of expenditure, which is why you must ask: can I afford to do all that after buying that house?
If the answer is yes, then go for it. If the answer is no, then here’s a good solution: save up for a big emergency fund before buying your house. This should consist of at least 3-6 months of living expenses. This way, you can take care of all these expenses while settling into your new home and working to save more money.
Don’t overexert your budget
Listen, first-time home buyers: just because you’re getting a brand-new home does not mean you need to get expensive new furniture and décor as well! In fact, this is the most common reason why new homeowners tend to go into debt after buying a house. For now, it’s best to just hold your horses, save up some money, and invest in interior designing when you have enough money so that you won’t bust your budget. To start things off, you can just hire a moving company, load your things up, and furniture the new house with the old stuff.
Evaluate the hidden costs
Lastly, you must crunch down the hidden costs before making your final offer. If it gets accepted, then congratulations: it’s time to move in – but not before calculating all those extra expenses. Aside from the actual closing cost, these include the moving expenses and the amount you’ll have to spend on immediate repairs. Other than that, there are also home insurance and property taxes to pay.
So, these are some tips that every first-time home buyer will appreciate. From starting your search to finding brokers and moving in, we’ve covered everything you’ll need to know when buying a new home!
Renee Wainwright is the gobox Mobile Storage Manager whose years of experience in the industry allow her to provide customised and tailored mobile storage solutions to suit residential, business and corporate customer’s storage and moving needs.