Many of us grow up with the aim of owning a 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. By doing your research and following a few guidelines, it will be much easier to achieve the home owner dream.
Have a set budget
It’s important to establish how much you can afford to pay, and what sort of property and location will fit within your price range before entering the property market. Visiting open homes, talking to real estate agents and viewing past sales results for the areas you are interested in are great ways to get a handle on the market. It is also important to keep in mind that your property is an investment too – access to transport, schools or shopping centres will ensure that if you decide to sell your property it will be appealing to future buyers.
Review your spending habits
List your income and all expenses, including bills, groceries and entertainment on a budgeting spreadsheet before approaching a lender. Make sure you consider 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
Many lenders require a record of savings history as part of the criteria for applying for a home loan. Figure out what you can live without while you are saving for your first home. Opening a high interest savings account or term deposit will help you grow your deposit faster.
Pay down debt and tidy your credit history
Try to pay off your personal debts as much as you can before buying a property. Minimising your debts and closing all unnecessary 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
Find out if you are eligible for a Government First Home Owners Grant. You can visit www.firsthome.gov.au to find out what you qualify for.