Are you planning to buy your first home? This is an exciting time! To help you, we’ve put together some things to think about.
Save a deposit
If you are thinking of buying your first home, you should already be saving for a deposit. The bigger your deposit, the better your chances of securing a home loan and the less interest you’ll have to pay. Ideally, you should aim for a 20% deposit since anything less than that usually means you have to pay Lender’s Mortgage Insurance (LMI). LMI is a significant one-off fee charged by the lender to protect them in case you default on your loan. Use our handy savings plan calculator to get you started.
Get to know your concessions
As a first home buyer, you may be eligible for first home buyer grants and incentives like stamp duty concessions. Talk to your Smartline Mortgage Adviser about concessions currently available to you in your state or territory. First home buyer concessions could save you thousands.
Pre-approval is an indication from a bank of how much they are willing to lend you. It involves submitting details of your financial position and the borrowing requirement that you have in mind. it’s helpful in that it can allow you to act quickly when buying, shows agents and sellers you are serious about the purchase and gives you confidence in how much you can afford to pay. All this can give you the edge if several other buyers are interested in the same property.
Minimise your debts
To improve your borrowing capacity and eligibility for loan approval, it’s wise to minimise your debts. Clear your credit card debt and get rid of any cards you don’t need. Also, be sure to pay all your bills on time so you have a clear credit history.
Calculate all the costs
The price of the property is not the only cost involved when purchasing your first home. You will also need to calculate stamp duty, the cost of building and pest inspections, moving costs, loan administration fees and conveyancer fees. Your Smartline Adviser can help you calculate everything so you know how much you can afford to spend.
Do your research
Your first home will most likely be the biggest purchase you’ve ever made, so make sure you have all the facts.
Research the district you want to buy into. Look into services like shops, schools and transport. You may want to consider renting in the area before buying. Get to know the local real estate agents as they can be a good source of knowledge of the local housing market (take it with a grain of salt, of course!).
Be sure to arrange pest and building inspections or a strata search if you are buying an apartment before you finalise any purchase. If there is any termite damage or structural damage to the property, this may change the price you are willing to offer or even your decision to buy.
The home loan market is complex and fluctuating. There’s a lot to get your head around, and rates and fees continually change. Your Smartline Adviser can help you negotiate the market, research finance options, take you through the paperwork and secure you the most suitable home loan with a competitive rate.