After a challenging few years of competition and record-high housing prices, first home buyers (FHBs) are making a resurgence throughout early 2019. Taking advantage of the property slump and reduced competition, FHBs are now playing their part and getting their foot in the door bringing a fresh sense of optimism. With recent clearance rates hovering around 55% in Melbourne, FHBs are making the most out of the market downturn and leveraging off small windows of opportunity.
The fall out of the Royal Commission and tougher scrutiny on investor lending has enabled this group to have greater success through the clampdown and reduction in interest-only loans. Although lenders have made it more difficult to secure finance, the prudent first home buyer is taking advantage of suppressed competition and scoring some fantastic opportunities.
Steps for first home buyers to secure a property
Selecting the right property
Even though prices have backed off, buyers need to take caution and not rush into perceived bargains. Considering the likely capital growth and use over a five to ten-year period is an important element in choosing whether to pursue a property or not. The property doesn’t have to be the ‘forever home’ however forecasting any life changes such as kids and lifestyles needs must be considered when selecting the right property. Establishing a list of non-negotiables and negotiable features of a property is a good place to start with the expectation that all features of a first home doesn’t necessarily need to be met.
Take control of your finances and be aware of requirements from lenders
Changes to lending are in full swing with lenders now scrutinising and assessing home loan applications as a result of the recent crackdown by industry regulators. It is now more difficult to secure finance with applications being declined at an all-time high. Not only is the prudent borrower researching and understanding the economic landscape of the property market but they are also doing everything in their power to ensure their application is as strong as it can be. In times of opportunity, FHBs need to be aware of their borrowing capacity along with thoroughly assessing their savings and expenditure history.
Ask for help if you need it
Home ownership is typically the largest and most important financial outlay for any FHB. It is for this very reason that many FHBs seek assistance and guidance in the purchasing process and in acquiring a home loan. As a FHB, it can be confusing to understand the method in being approved for a loan along with being aware of the necessary fees and charges associated with the purchase cost. A mortgage broker has become a key figure within the FHB financial team to ensure the product selected meets their needs and the loan process is efficiently processed. Asking for help in this exciting yet very important moment in a FHBs life is a clever action to ensure the process is a smooth as it can be.