14Feb
Buying Your First Home?
If you are hoping to buy a property here are a few steps that can help you achieve that goal.
Clearly Define Your Goals
Having specific goals is the first step to achieving them. Make sure your goals are realistic and specific with a set time frame.
Establish Your Budget and Stick to it.
Getting a home loan is not easy at the best of times. In 2022, banks will want to see a good savings history and low to moderate spending habits. Ensure all debts are paid off before you consider embarking on the biggest financial step of your life.
Maintain Your Job and Look for Opportunities to Make a Little bit More
You will most likely need to have been in your main job for at least a year, preferably more. Any income you can earn over and above your normal wage can go straight into your deposit. So jump at the opportunity for overtime or maybe consider a second job (even if it's only a few hours a week). This will help you to build up a nest egg for your deposit but it accept that it may not count for much when the bank assesses your ability to meet repayments.
Eliminate Credit Card Debt
Most lenders expect you to have a zero balance on your credit cards to qualify for a home loan. However, if you have multiple cards (even with a zero balance) this will be a warning sign to the banks. So, have just one credit card and ensure the balance is paid in full each month. Also, make sure the limit is not too high.
Decide on Your Preferred Lender
You can do this by yourself or with the help of a Finance/Mortgage Broker. Knowing how much you can borrow is crucial to your property search.
A pre-approval may help you when making offers but your contract should always be conditional on formal finance approval.
Research
You need to understand what properties are worth and what they are selling for. Searching the real estate portals is just one step. You need to visit open homes with an analytical eye. Make a game of this and estimate and write down what you think will be the final selling price of each property you visit. Then compare your notes once you've found out the actual selling price.
The experience you gain in this process could save you tens of thousands of dollars and will be time well invested.
Of course, you'll also be able to spot a bargain!
Look for Tools and Ask for Advice
There are lots of different tools - both online and within real estate agencies. Work out 2 or 3 that are best for you and use them consistently.
Get advice from people you trust. However, always remember that the decision is yours and you must be prepared to take full responsibility. When talking to real estate agents, remember they are working for the Seller - not you. Their job is to get the highest possible price for the Seller.
Summary
Owning your own property is a journey that sadly, some people never start. Others don't get onto the property ladder until late in life. If you are able to buy your first home before you are 35 years of age, even just paying the minimum amount with a 25 year loan will see you own the home outright before you retire.
Of course, along the way there will be plenty of distractions, opportunities and disappointments but that's another story.
