Buying a house can seem like an enormous task with many complicated aspects to navigate. Sure, you will have to pack and hire removalists in Bentleigh, or removalists in whichever suburb you are from, but a lot has to happen before moving day. This article will provide you with tips and tricks to make your home buying journey as smooth as possible.
Government Assistance
The First Home Buyers Grant, is an amount of $10,000 that the government will contribute to first home purchases in Metropolitan Victoria. For regional first home purchases, the contribution is $20,000.
The First Home Buyer Fund allows eligible home buyers to receive a government contribution of up to 25% towards the purchase price of their property, reducing the minimum required deposit to 5% and avoiding the need to pay Lenders Mortgage Insurance (LMI).
The Victorian Government has also abolished stamp duty for first home buyers who purchase a house for $600,000 or less. Stamp duty for properties priced between $600,00 to 750,000 is tapered for first home buyers.
Get a Home Loan Pre-Approval
Before you can make any offers on a property, you will have to get a home loan pre-approval from a bank. Banks will want to know every detail of your expenses and see exactly where your income goes every month.
Consider how much you can afford to borrow, and remember that the bank will try and loan you as much money as possible. Adhere to the rule that mortgage repayments should be between 25% - 35% of your monthly income and no more.
Do not lock yourself into mortgage repayments that are beyond 35% of your take-home income. Otherwise, you could find yourself being “house poor”, with the majority of your income going towards homeownership and mortgage repayments.
Define What You Want and Do Your Research
Start making a list of your must-have attributes and can live without attributes in a house. Figure out which areas you can afford and start researching previous sold prices and attending auctions to get a feel for demand in the area.
Really narrow down the criteria of what you want in a house. This will help you weed out any properties that don’t meet your requirements and you won’t waste any time at unnecessary inspections.
Consider private sales over auctions. When buying a house by a private sale there is a 3 business day cooling-off period that allows for change of mind and a contract of sale can be withdrawn. Auctions have no cooling-off period.
Building and Pest Inspection
During an inspection time for the property or in the 3 business day cooling-off period, arrange for a building and pest inspection. A Building and Pest Inspection report will cost between $500 - $1000 and will report on present and future issues with the house.
Be at the building and pest inspections, follow the inspector and see what they are looking for. Ask to be run through the report and get them to show you the issues. Ask questions such as how major is the issue? What will it cost to fix? Will it be a problem later? Is the issue still active? Would you buy the property knowing these issues? And what would happen if the issue was not addressed?
If issues are found with the property you can ask the seller to fix them or they can provide you with grounds to negotiate on price.
Conveyancer
You will need a lawyer or conveyancer to assist you with reviewing the contract of sale. Go with a conveyancer, as they are cheaper and often move quicker than lawyers. A great conveyancer will take care of everything on settlement day and be the facilitator of the change over of the house title into your name and ensure that the bank draws down on your mortgage for the purchase. It may sound like a simple enough transaction, but it's not. A conveyancer has the specialist skills to make sure everything goes through smoothly on settlement day.
There is no doubt that buying your first home will be a journey. Just remember, do your research into the market of your preferred suburbs, get a home loan pre-approval, don’t skip the building and pest inspection, and engage a conveyancer to assist with your contract and settlement day. Now you can confidently begin hunting for your first home.
