10 Things Every First Home Buyer Should Know

Are you a first home buyer looking to purchase your first home?

If so, there are various factors to take into account and decisions to make before you can even begin the furnishing/moving-in process.

You may feel a little overwhelmed (to say the least). This is completely normal! A house is a large investment, one that you may own for the rest of your life and even pass down to relatives, so it is an important moment.

This article will outline 10 things you should know as a first home buyer and how they will help you make the best, most informed decision about your new home.

This article covers the following topics:

1. Budgeting is Vital
2. Tools are Available Online
3. Check if You’re Eligible for a Home Loan
4. Save More Than Just the Deposit
5. Check if You’re Eligible for First Home Buyers Grant
6. Mortgage Insurance is an Option
7. You May Need to Compromise
8. Take More Than Aesthetics into Account
9. Consider Home Loan Pre-approval
10. Take Your Time

We will discuss these in more detail below.

Are you a first home buyer?  Be referred to the best property lawyers on the Sunshine Coast

First Home Buyer – Budgeting is Vital

When considering purchasing your first house, it is important to keep budgeting at the forefront of your mind.

Budgeting is the process of splitting your spending into individual categories, assigning each of the categories with a set amount of money to spend.

Purchasing a home is an expensive ordeal and will likely require decades of payments in order for you to fully pay off your mortgage.

For this reason, being realistic about money is vital and saving a sufficient portion of your income to pay off your mortgage, or to initially purchase the property, is highly advised.

Tools are Available Online for a First Home Buyer

You should also keep in mind that there are a variety of online tools to assist you in the purchasing and payment maintenance of your new home.

When beginning the process of budgeting, you may want to consider a budget calculator online to make this process that little bit easier.

The Australian government site “Money Smart” offers a budget planner in which you easily fill out all relevant aspects of your income to help you budget.

Furthermore, some banks and individual finance businesses will offer home loan calculators to give you a general idea regarding your home loan. 

Check if You’re Eligible for a First Home Loan

This one may seem a little obvious, but it is important that you ensure you are checking that you are eligible to take out a home loan.

A vast majority of people are dependent on a loan to be able to afford to purchase a house.

This is simply because houses are expensive and are an investment that you will likely own for a long portion of your life.

You should also check how large a loan you can take out.

The bank may not be willing to loan you money due to a poor credit score, significant financial issues in the past, or a variety of other reasons.

First Home Buyer – Save More Than Just the Deposit

You should also ensure you are saving more money to put towards your new property than simply enough to pay the deposit.

A deposit on a home loan is a percentage, ranging across different loaners, that you must pay the bank towards the payment of your home.

From a bank, you may be required to pay a deposit of 20%, sometimes even more!

This money can be quite difficult to gather, especially if you have your eye on a particularly expensive property, and you may feel like once you have the money, why not just buy the house?

However, it is vital in ensuring you do not later fall into unmanageable debt and that you save more than simply the deposit of your home.

Are you a first home buyer?  Be referred to the best property lawyers on the Sunshine Coast

Check if You’re Eligible for First Home Buyers Grant

You may not be aware, but did you know that as a first home buyer, you may be eligible for a first home buyers grant?

Buying your first home can be overwhelming.

There are so many decisions and doubts that may arise. However, the state/territory governments offer first home buyer grants to some new home purchasers to give them that extra vote of confidence and stability in their decisions.

These cash incentives start at approximately $10 000 but will vary depending on your home state/territory.

In order to receive this grant, however, you must fulfil a specific criterion.

If you do not qualify though, there are several other benefits you can apply for when buying your home.

This extra money can be of extreme benefit to you and your future home, so it does pay to do your research to decide whether or not you are eligible.

Mortgage Insurance is an Option for a First Home Buyer

Did you know that, if you’re struggling to gather your deposit for your loan, mortgage insurance may be a viable option to help you?

A deposit of 20%, as aforementioned, can be a real struggle to come up with an all-in-one payment.

Well, lenders may approve your loan when you have been unable to come up with the payment provided you pay the lender’s mortgage insurance.

Lenders’ mortgage insurance allows debtors to be allocated up to 95% of the loan they are applying for while ensuring the lender is covered if the payments default down the line.

A First Home Buyer May Need to Compromise

Everyone has a dream house.

You know, the one you see yourself and your family celebrating holidays and growing old together in.

Well, unfortunately, it may be necessary to compromise on your dream home to find a house that fits all of your needs, both personal and financial.

Location is a significant topic that may need to be negotiated, especially in today’s property market. 

Take More Than Aesthetics into Account

Everyone wants an attractive home.

However, there are more important things in homeownership than simply the appearance of your house.

It’s easy to become swept up in the beauty of a property.

Features like a large lawn, a beautiful garden, or well-designed architecture can make a house very attractive to you and may make a rash or at least heavily influenced decision to purchase the house based on appearance alone.

It is vital that you take into account all the factors that will influence your experience with the property to make sure you do not regret your decision in the years to come. 

First Home Buyer – Consider Home Loan Pre-approval

Loan preapproval is another great benefit to give you some peace of mind when looking for a property.

This is a highly suggested option as it gives you a ballpark for the price of the property you can buy while you’re still searching, rather than having your heart set on a house just to be told you cannot take out a loan so large. 

Take Your Time as a First Home Buyer

When looking for a home to settle down and possibly spend the remainder of your life in, it is important that you take your time a choose carefully.

You may want to invest some of your time and money into a conversation with a building inspector or other professional for advice as to whether the property is both stable and right for you.

Buying a house is a life-changing moment, there is no need to rush!

Are you a first home buyer?  Be referred to the best property lawyers on the Sunshine Coast