Becoming Financially Fit – Guideline for Preparing to Buy your First Home!
Many Australians grow up with the aim of owning their own home one day, and with interest rates at their lowest in 50 years, it may be a good time for financially-fit first home buyers to take the plunge.
For most of us, buying a property is probably the biggest financial commitment we will make in our lives, so it’s important to approach it wisely.
By doing your research and following a few guidelines, you’ll be able to turn the great Australian dream into a reality.
Be clear on what you can afford
It’s important to establish how much you can afford to pay, and what sort of property and location will suit you before entering the property market.
Consider your lifestyle and do your research on the types of properties available to you at your price level.
Visiting open homes, talking to real estate agents and viewing past sales results for the areas you are interested in are all great ways to get a handle on the market.
Before approaching a lender for a home loan it’s a good idea to review your spending habits.
List your income and all expenses, including bills, groceries and entertainment on a budgeting spreadsheet or calculator.
Make sure you factor in other upfront and ongoing costs involved in buying a property, such as stamp duty, conveyancing and legal fees, strata fees if purchasing a unit, and council rates.
Build up your savings account
Even though lenders no longer ask for a 20% deposit, it’s still a good idea to establish a regular savings habit. In fact, many lenders require a record of savings history as part of the criteria for applying for a home loan. Work out what you can live without while you are saving for your first home. If possible, consider share houses or even moving back in with family to save on rent, and look at little ways to save such as cooking dinner at home rather than eating out.
Pay down debt & tidy your credit history
It is a good idea to pay down personal debt such as credit cards and store accounts as much as you can prior to buying a property. Close all unnecessary accounts and ensure that any regular payments are up to date. Paying down your debts and minimising the number of accounts you have will not only allow you to borrow a little more, but also give you a bit of financial breathing space in your budget.
A helping hand
Make sure to find out if you are eligible for a Government First Home Owners Grant, as not all states and territories offer concessions for first-time buyers.
For example, the Queensland Government’s $15,000 Great Start Grant is only available to buyers who are building or buying a new home, while in Western Australia grants are available for first home buyers who purchase either a new or established property.
If you would like to find out more information on purchasing or what homes are applicable for the $15,000 Great Start Grant you can contact Rory Wex @ Cooke Property on 0414 134 265!
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