So, you’ve decided you want to buy your first home?
Fantastic, you’re in the right place! Whatever stage you’re at - whether you’ve just started saving, are seriously looking around or about to make an offer – the following tips should help get you ready to sign on the dotted line.
Do I need to watch my pennies?
It’d definitely help! When buying their first home, most people need to take out a home loan. And the most important first step is saving for a deposit.
Budgets are boring. We get it. But there’s no way around it – some sort of budget is the most effective way to save for a home deposit. It means you’ll have a good idea of money coming in and money going out, so you’ll then have a much better handle on the amount you can regularly set aside for your deposit.
The bigger your deposit, the less you’ll need to borrow and the lower your mortgage repayments will be… and that’s a good thing. It’s also a good thing if you can minimise or even eliminate other debts, such as credit cards, car loans or personal loans. They tend to have higher interest rates and those repayments eat into funds you could otherwise be using for your home deposit.
And don’t underestimate how much cash you can save on the little everyday things. It’s amazing how savings add up when you make even small changes to your regular spending patterns – without having to become a hermit! And you can then divert those savings into your deposit.
Look around for a helping hand
As a first home buyer, you could be eligible for assistance under various government schemes.
A number of Australian State governments offer first home owner grants, while others offer rebates to reduce stamp duty, both of which can be very handy in making your house purchase more affordable.
Other useful sources of help are banks and financial institutions. Believe it or not, some of them (including us ) genuinely want to help their customers as much as they can.
At Bendigo Bank, our lenders know their stuff. They are our internal gurus on all things home-loan related and would be delighted to chat with you. They can help you calculate how much you can afford to borrow (so your repayments don’t put you under pressure), explain the different type of home loans and interest rates and generally guide you through the whole home loan process.
It might sound obvious, but being well prepared and doing your research can reap big rewards when buying your first home.
It’s easy to fall in love with a home at first sight. But doing some solid research about locations you prefer, house styles you like and prices you can afford will help ensure your head and your heart come up with the best decision together.
There’s also a lot to be said for doing extra homework on your loan calculations, and being aware of all possible costs. Your lender will help you understand potential loan repayments, future interest savings and associated bank costs, but using a bank’s online calculator can help you confirm and become more familiar with these figures yourself.
And try to avoid any unexpected financial surprises – the best way to do this is to be aware of the ‘less obvious’ costs. Charges such as loan application fees, legal fees, mortgage insurance, home and contents insurance and stamp duty can sneak up on you if you don’t factor them in from the start.
Remember, preparation is key!
Buying your first home is an exciting time and there’s lots to look forward to!
If you keep in mind the tips we’ve mentioned, navigating your journey to officially becoming a home owner should be a whole lot easier.