Top tips for first home buyers

Buying your first home is very exciting, but can also be a little daunting – both financially and emotionally. It’s likely to be one of the biggest investments you’ll make, so being prepared and aware is super important. At Natural Real Estate we pride ourselves on offering the best advice to all our customers, and we are only too happy to chat if you need advice about purchasing a home. Here are some of our top tips for first home buyers.

1. Start saving now

It’s smart to start saving as soon as you can and save the biggest deposit that you can. This not only demonstrates to your lender that you can exercise enough discipline to accumulate a large amount of savings, but you will also have a buffer of equity in the property from the beginning.

2. Be clear on your budget

Your bank may suggest you can borrow up to $400,000 in your initial meeting, but it’s much safer to search for a home that is well below your maximum price. Buy a property that you can afford now so that you don’t overstretch yourself.

3. Allow for extra costs

One of the important top tips to note is that there are extra costs associated with buying property. Not only is there stamp duty, solicitor’s fees and inspection reports to consider, but if you choose to borrow over 80% of the property’s value you’ll be faced with lenders mortgage insurance (LMI). LMI isn’t actually for you – it’s for the lender, but you’re the one that has to pay it. These little extras can quickly add up and be a burden if you haven’t accounted for them. Don’t forget, interest rates are at historic lows, so be prudent and allow for at least a couple of percent increase over the next few years.

4. Choose between ‘wants’ and ‘needs’

It’s very easy to confuse your ‘wants’ with your ‘needs’, but it’s important to distinguish the two when buying. Do you really need that fourth bedroom, or do you need to be able to walk to the beach, or is it something you want? Take a good look at your salary, debt levels, costs of living and what the repayments would be like for your dream property. Can you afford it? If not, prioritise what features are the most important in your new home. Your first home won’t be your last, so it is ok to compromise!

5. Take advantage of government concessions

When you’re purchasing your first home, every dollar can help so make sure you are aware of what government grants are on offer. For more top tips for buying a home or for more information on the current grant visit the State Revenue Office Victoria website, or call our team on 03 5261 4711.