The Best Value guide to buying your first home

A handy guide to home-ownership

A home of your very own. It’s a quintessential Aussie dream, but navigating the ins and outs of the home buying process can be an overwhelming experience for a first-timer. There are home loan applications, pages of contracts full of legalese, building inspections, taxes and grants to consider, not to mention a fiercely competitive marketplace.

To make sure you are armed with all the right information when setting off on your first home journey, we have put together a handy seven-step guide for the uninitiated.

1. Make sure your finances are in order

Start by finding out if you are eligible for a home loan, and how much you can borrow in total. There’s no point looking at million-dollar houses if your budget doesn’t quite meet that milestone—you’ll be setting yourself up for disappointment! It’s a good idea to speak with a mortgage broker or a contact at your bank who can show you the home loan ropes.

The mortgage lender will need an accurate picture of your current financial situation, and will ask for proof of regular earnings such as payslips, PAYG summary and bank statements. Get these ready beforehand to make the process quick and easy.

2. Save those pennies

Saving a substantial deposit shows your lender that you have the financial security and commitment to be disciplined with your money over a long period of time. The larger your deposit, the larger the equity you have in your property right from the start, meaning you pay less interest. Saving a larger deposit will also save you money on lenders mortgage insurance, which can come into effect for borrowers who have less than 20 per cent deposit of the sale price.

3. Stay within your means

Your first home doesn’t need to be a mansion with water views; it’s important to remember that this is the first step in your property journey and you can work your way up the property ladder over time. This might mean compromising on the location or condition of your house at first to ensure affordability. Life is unpredictable, so plan your budget based on your current means, not what you think you might be earning in a few years time.

Your real estate agent <link to agent page> will be able to show you a range of great entry-level options <link to listings page> in your price range.

4. Seek out expert advice

Everything you need to know about your new home is disclosed in the title and contract of sale; however, you will need a property lawyer or conveyancer to look over the documents to point out important things you may not notice—such as easements, or covenants. Get your head around all the relevant information before putting pen to paper.

5. Don’t forget the stamp duty

Many people forget about stamp duty when budgeting for their new home. This tax, which varies state to state, is unfortunately an inescapable part of the property buying process. The good news is, as a first home buyer, you may be eligible for an exemption.

New South Wales offers stamp duty concessions for first-time buyers on new homes; full exemptions for a home valued up to $550,000 and concessional rates for new homes valued between $550,000 and $650,000. Check out your state’s policy on stamp duty before finalising your budget.

6. Do your homework

When you buy a house you buy it in the condition it is sold in, so before committing to your purchase, do your own research or hire a building and pest inspector to give your future home the all clear. Things to look out for include rising damp, structural faults, cracking, plumbing and electrical faults—any one of these could cost up to tens of thousands of dollars in repairs, leaving you with a large bill before you’ve even had time to unpack your furniture.

7. Move quickly

Last but not least, be ready to strike while the iron is hot! It’s vital to have your finance approved and your deposit ready to go when you start seriously looking at potential houses. This means you can swoop in ahead of the competition when the right opportunity arises.

Good luck!

Are you looking for your first home? View our listings here, or call Best Value Real Estate on 1300 880 889 to speak to one of our friendly, professional agents about your options today.

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The Best Value guide to buying your first home