3 questions that first home buyers need to ask themselves
If you’re a first home buyer, you might find yourself overwhelmed by the sheer scope of the property market. There will be all sorts of questions running through your head at this point, but here are three you should be putting at the very top of your FAQ!
Have you ticked off all these boxes?
“Do I know my borrowing power?”
A recent study from the Commonwealth Bank found that only half of Australians could identify the factors that affect their borrowing power! This knowledge is integral before you start your search for a property, or else you could end up falling in love with something you actually can’t get financing for.
The trick is to figure out your price range, save up a deposit and earn good credit before you head to a lender, along with all the regular employment proof forms and such. This way, you can find out how much you can borrow before getting your heart set on a particular kind of real estate.
“Have I found the right repayment strategy?”
This is a completely different experience to tenancy.
There are a number of different ways of paying off a loan, all of which are dependent on you as a borrower as well as your lender. For example, you might be tempted by an interest-only loan, which can ease your initial payments, but can also end up being more expensive in the long run. Every kind of loan has different advantages and disadvantages. What is important is that you speak to a mortgage broker and ensure that you get the widest range of loans as possible to find the one that is right for you.
“Am I ready to be a homeowner?”
As big a step as it is to own your own home, it does come with certain costs and responsibilities. When you rent, you won’t have to pay body corporate fees, council rates and certain repair and maintenance costs. As a homeowner, you do, and that has to factor into your budget. Furthermore, a McCrindle study found there is a significant portion of the population who actually prefer to rent – you might be one of them. Before making that commitment, ensure that you can make the repayments but also understand this is a completely different experience to tenancy.
Need help with these questions, or have the answers ready and are keen to take the next step? Get in touch with one of our mortgage advisers and find out how we can help you continue the home buying process!
