There is much excitement when it comes to buying your first home, but it can also be difficult if you are not clear about the entire process. Knowing the process of buying a home and the real estate terminology can be hard, and with property price increases in many parts of the nation, buying a home can be costly; hence, it’s best to get it right.
However, buying your first home doesn’t have to be difficult if you know how to go about it.
That is why we have put together this guide to provide answers to the most popular questions you might find concerning when you are buying your first home. It’s written to give you general advice to execute the home-buying process from the beginning to the end, so, you can make informed decisions while saving time and money.
Ultimate Guide to purchase your First Home
We arranged them into four different categories as contained below:
- Start Saving Early
The first step to buying your home is to start saving towards the project. Here are the important costs to consider when you’re saving for your first home:
- Down payment: Your down payment requirement will be based upon your choice of mortgage and lender. There are conventional loans specialized for those buying a home for the first time. However, even a little down payment can be difficult to save.
For instance, on a $500,000 home, a 3 percent down payment is $15,000. Decide a goal using a down payment calculator, and then schedule automatic transfers from your checking account to savings account to start with.
- Closing costs: These include the fees and expenses you pay to complete your mortgage, and they often stand between 2% and 5% of the loan amount.
- Move-in expenses: Some cash will be needed to carry out some home improvements. Set aside some money for quick home repairs, furnishings, and upgrades.
- Choose how much Home you can afford
Determine how much you can conveniently pay for a house before you start shopping. You can set a price range depending on your debt, income, down payment, credit score, and the location you plan to live.
- Determine the Amount you can borrow
Before you begin to view properties, first determine how much you could borrow. It’s a wise idea to have an actual amount in mind, so you don’t have to risk fixing your heart on a property only to discover that you can’t afford it. There are some ways to find out what you can borrow:
- Speak with some lenders: Your financial institution (bank in particular) might be a better place to start if you only want to find out how much you can borrow. But remember they may not offer the best deal when you are ready to get your mortgage. Lots of banks and brokers have an affordability calculator which can be used to get a fast idea of the property you might afford, without denting your credit report.
- Reach out to a mortgage broker: A mortgage broker can get you many deals. Just ensure you find a ‘whole of market’ broker – because not all brokers have access to all the best deals on the market. You also need to be aware that some mortgage brokers charge a fee for consultation. If they do, they should make this known in advance.
- State government grants: As a first-home buyer, you may benefit from state government grants, schemes and discounts to help simplify buying your first home. These may include federal government schemes to help you save a deposit.
- Carefully pick a Real Estate
A knowledgeable real estate agent will check the market for homes that satisfy your needs and provide you guidance through the negotiation and closing phase. Get recommendations of agents from other first-time home buyers. When interacting with the agents, find out about their experience assisting first-time home buyers in your market as well as their plans to find a home for you.
For friendly and smooth home-buying experience, contact our experienced agent.
- Table the Right Offer
Once you’ve planned your finances properly and started to save your deposit, it’s time to be focus on house-hunting. You can contact us to get first-hand information about available offers. If you’ve already seen a house you like, you can proceed and make an offer. Consider the benefits and drawbacks of various types of homes, factoring your lifestyle and budget.
A townhome will be cheaper than a free-standing single-family home, but you won’t have as much privacy living with shared walls with your neighbors. Remember to plan for Owners Corporation Fees when you are searching for units, apartments, townhomes, or houses inside gated communities.
- Pay for checking a Home
Finding the perfect property starts with picking the right suburb and choosing the right home type, but it goes beyond that. You may need to carry out pre-purchase inspections such as Building or Pest inspections.
- Negotiate with the Seller
You may be able to save money by negotiating with the seller for them to pay for some home repairs in advance, or by reducing the price to accommodate the cost of home repairs you will have to later make. The local market will determine your negotiating power. It is more difficult to make a tough negotiation when there are more buyers than sellers. Work with your estate agent to determine the best strategy for your local market.
- Exchange Contracts and fix your Completion Date
After approval of your mortgage, it is now time to exchange signed copies of the sales document.
The solicitor will be responsible for transferring the money to the seller at settlement (or, to the seller’s bank if they are paying off their mortgage). And, they will ensure that your lender pays the remaining purchase price.
You will now need to:
- Pay your solicitor
- Agree to a settlement date.
Similar to any big projects, a successful home-buying experience involves getting everything right from the beginning to the end. The tips to first-time home buying above will provide you guidance to run the process, save money, and finalize the deal. Happy buying!