Buying our first home is, for many of us, one of the most pivotal moments in our lifetime. It signals the beginning of a new chapter - one that brings excitement and a whole new level of responsibility.
In today’s age, becoming a first-time homeowner isn’t a walk in the park. The real estate landscape isn’t as accessible to younger generations as it was to the generations before, but this makes receiving the keys to a home of your own even more rewarding.
If you’re considering buying your first home, there are some things you should consider before embarking on the journey. Follow this step-by-step guide and you will make smart decisions.
Step 1: Make sure you’re ready
The desire to own a property is different for different people and is often dependent on circumstances. You may think you’re ready to settle down in one home - perhaps you plan to start a family with a partner - but if you have a voice at the back of your head that craves freedom and change, you’re probably not ready to be tied down to such large financial obligations.
However, if you have a steady job and a good income and are looking to build a stable and secure future, you should explore your options. But remember, there’s no rush!
Step 2: Get your finances in order
Perhaps the most important thing you should consider - and one that will determine whether or not you can even step onto the property ladder - is the condition of your finances. For many people, the only way of purchasing a home is to get a mortgage or loan from the bank, but doing so is a monumental financial commitment and should not be taken lightly.
What’s more, if you have a lot of unpaid debt, chances are that you are not ready for the responsibility - or financial means - of a mortgage.
The next thing to do is to check whether you’re eligible for a home loan. In order for a lender to entrust you with repaying a loan, they will look at your income, your debt, credit history and more.
Step 3: Consider all the costs
Before you buy a house, it’s crucial to take into account all of the costs involved - some of which first time buyers may not be aware of:
Advice: it costs to seek advice from financial advisors, lenders and accountants.
Deposit: in order to secure the keys to a new home you need to put down a deposit of between 10-20% of the selling price. The more you put down upfront, the less you will end up paying overall.
Stamp duty: all Australian territories have the right to levy stamp duty tax on property purchases.
Applications: there is a lot of official documentation that needs to be processed when any property is purchased, so expect to cash out for legal and conveyancing fees as well as mortgage applications and valuations.
Insurance: the more money you borrow from a lender, the higher your Lender’s Mortgage Insurance (LMI) will be. This is why it’s better, financially, to put down a larger deposit.
Once moved in, on top of the above costs and your mortgage repayments, you will require to pay council tax, home insurance, maintenance, utility bills and more.
Step 4: Start the property search
Once you have considered all of the costs of buying a home, and you have the green light from a financial advisor or accountant to go ahead, you can start to think about the sort of property you want!
Seek expert help from real estate agents in Sydney who can help you find a home in your ideal location within budget. The most successful searches require hard work, persistence, an open mind and compromise. If you have a good attitude and go with your gut instinct, you will secure your dream home in a matter of months.
Good luck!
