Buying a house is one of the biggest decisions you will ever make. It’s not just a financial consideration but also a lifestyle one: you want to make the right decisions for your finances, your family and yourself.
Here are some tips to guide you towards home ownership from Mary David, a Ray White Rural top performing agent, and Glenys Newstead based in Oberon and the Central West.
1. DO YOUR HOMEWORK
Buying a home might seem difficult at the outset, but a little preparation can go a long way. This means planning your finances well in advance.
Putting together a budget and setting a savings goal can help you bring together the funds for a home loan.
There’s one question to ask yourself before taking out a home loan: How much can I borrow? Check with your mortgage broker about types of home loans that might suit your scenario, and the repayments involved.
Generally, lenders will need around 20 per cent of the property’s purchase price for a deposit, but there are also other charges to take into account.
For instance, stamp duty, loan set up costs and legal fees can all come into the equation.
You may even be eligible for government incentives as a first-time buyer! Each state or territory has its own rules surrounding this, so make sure you understand the criteria before applying.
Once you’ve got an idea of the costs involved, you can start to tuck away your pennies. As a starting point, aim to save enough to cover the 20 per cent benchmark, plus a bit extra.
This can help you avoid extra costs, like lenders’ mortgage insurance, and show the lender that you’ve got a reliable savings background.
2. FINDING THE RIGHT HOME
Now that you’ve got the financial foundations laid down, you can start the hunt for your new home.
But with such a wide array of property for sale, where do you start? Have a think about the type of home you’d like to live in. Does the in town lifestyle appeal to you? A bit of acreage might be your dream. Or is a traditional house with a backyard more your style? Land for sale is another option for those wanting to build their own home.
Real estate agents can be a key player in this decision. They can help you survey localities with properties and land for sale that fit your list of criteria – including your budget.
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Before putting in an offer or bidding at auction, it’s time to get down to the nitty-gritty.
This might mean having a pre-purchase building and pest inspection done.
While you may looked over the home during a walk-through or open home, a building inspector can pick up on any major (or minor) structural problems with the property that could set you back financially in the long-run. Armed with this information, you might arrive at the negotiating table with a few bargaining chips up your sleeve. Just remember: These services come at a cost, so it’s a good idea to include them in your budget at the outset.
4. THE BUYING PROCESS
So you’ve made an offer to the vendor, or set the highest bid: What’s next?
The purchase isn’t set in stone until the contracts are signed and exchanged. Until this point, you and the vendor have the option to pull out of the sale.
To make sure you’re not caught out, it’s a good idea to get a solicitor on board to help you understand the process. For instance, there is a five-day cooling-off period after exchanging contracts in NSW in private treaty sales.
5. MOVING IN
Congratulations, the removalists have gone and the dust has settled. You can sit back and enjoy your new home. Your attention can now shift to paying down your mortgage and keeping up with the day-to-day expenses.