Are you thinking of buying your first home? Are you keen to take that big step into independence but are unsure of how to approach such a huge life decision? Well here are the tips and tricks to making your first property purchase a memorable one, for the better.
Step 1: Plan your budget
It is essential that when endeavouring to purchase your first home that you consider the financial obligations that come along with such a huge responsibility. Plan your budget and ensure that you allocate your money effectively and in a way that is sustainable. Buy sticking to a plan you can manage your money in a way that won’t see you living from pay check to pay check.
Step 2: Know your limitations
When considering buying your first home you must distinguish the difference between what you want and what you can afford. We all have a vision of what our first home will look like, and most likely it is an unrealistic property. However, start small and when the time is right, you will eventually be able to upgrade and work towards owning that dream home.
Step 3: Research all your home loan options
The home loan market is very complex and competitive, it’s hard to know what option suits your lifestyle the most and will reap the greatest reward for you when buying your first home. You need to develop an understanding of the different types of home loans that there is on offer and distinguish which one matches you and your lifestyle, this is a crucial part of achieving success when buying your first home.
Step 4: Ensure your eligibility for a home loan
As well as choosing the right home loan, it is important to make sure that you are eligible for a home loan. Contact several lenders to develop an understanding of how much money you can borrow. This allows you to plan realistically for the purchasing of your first home.
Step 5: Understand the sales process
It is important as a first home buyer that you have done your research and properly understand the process of buying a property. The model of the sales process varies from state to state, so ensure you are familiar with the process in your area so you can approach the process as prepared as possible with a rough understanding of what to expect. In Western Australia the Department of Commerce (now known as the Department of Mines, Industry Regulation and Safety) offer free buyers advice. Click here for more information.
Step 6: Consider your credit history
To receive a loan or government support, ensure that your credit history is well in order and a positive representation of your capability to deal with money. A bad credit history can potentially result in the rejection of a home loan or government support.
Keep in mind that if you are ineligible there is also the First Home Owners Grant. Everyone has their own way of when and how they get to owning their first home but it is so important to do the ground work before entering into a long term commitment.