Buying your first home is an exciting time but there are some key questions you need to ask yourself before you take the leap.
1. Is it the right time?
This question needs to be asked and then asked again! The notion of owning your own home is a fantastic ambition but is it the right time for you? Pressures in buying can come from multiple trusted streams such as family, friends and or colleagues and it is hard to know what is right for you. An important question to consider is are you are getting into the market because others are or telling you to or because you are financially and mentally ready?
2. Am I financially ready and how much money do I need?
A deposit, stamp duty fees, homeowner’s insurance, removalists, legal fees are just some of the costs to consider when purchasing a property. However, the most important question is are you going to be able to service the loan? Furthermore, will your salary be stable enough to make the required repayments?
A mortgage is a long-term financial commitment that should not be taken lightly. You can’t just opt out for a few months. A sound and comprehensive analysis of your current and possible future financial situation must be undertaken before you are in a position to buy.
3. What is the goal of the property?
If buying your first home is something that you desire and you have the finance to do so then the next question is around the property type that suits best suits your goals.
- Is it to live in for a few years, sell and move?
- Are you buying a property that will grow into a family home?
- Do you wish to purchase a property and rent it out as an investment?
These questions will guide the purchasing process along with the location that you wish to live in.
4. Are there any incentives?
As a first home buyer, you may be entitled to specific grants and or subsidies for particular types of properties. There are various benefits and concessions and it is important that you are fully aware of what you are eligible for when purchasing your first property. Please see SRO.vic.gov.au for more information.
5. OK, buying now is the right decision, now what?
Choosing a lender can be a confusing and daunting task with a decision on the type of loan and the abundance of options. A review of the lending market will find the lenders that are best suited to your needs. Then once the shortlist is obtained, it’s all about getting a good deal!