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How to buy your first home

by elena (follow)

The day has come - you are to buy your first home. Are you nervous? Excited?

This might be one of the biggest purchases you’ll make, so you better arm yourself with quality advisers and do the research. If you are all for “out with the old, in with the new”, there’s a big difference between enjoying your new home and wondering when you should start looking for the next one.

Buying a new home can be a stressful experience and a long process unless you know the answers to the right questions. So, if you haven’t already, you might like to think about the following.

1. Prioritise what you need and want - What are the benefits of a new home?

Knowing what you need is going to help you narrow down your options and determine your long-term goals. Why do you want/need a new home? Is it because you seek independence, or you see a new property as a good investment? Is it about time you stopped wasting money on rents?

The first step would be to create a checklist, and depending on your homeownership goals, a traditional single-family home or a townhouse can have its pros and cons, especially when you are working within a budget and need to make compromises.

The neighborhood, commuting, school system, even kitchen, bathroom, and other house amenities should be a part of your checklist. When you go to look at houses, write down notes according to your checklist.

2. Plan your budget and research the market – Can I afford a new house?

Now that you’ve decided on your dream home, research the market and determine if you can afford it, and if not, what are your options. You can plan and research on your own, or find yourself an insider to the world of home buying, that is, a real estate agent. A good agent can be your asset; however, you would want someone dependable, so talk to the people you trust before choosing your agent. Real estate agents specialise in certain areas or types of properties, so you would want to consider these advantages as well.

The most important thing is to plan and stick to your workable budget. Very few people will close the deal with cash, so you might have to consider some type of loan or mortgaget, and if you decide on a home loan, you need to consider expenses related to the property taxes, insurance, house maintenance and more.

3. Seek professional advice – Should I consider a mortgage broker?

The worst mistake for new homebuyers is to go beyond their budget. If you’re having problems understanding the mortgage payment structure, or pros and cons of bank loans, engage a mortgage broker. Different banks give different rates and different terms, so make sure you are comparing apples to apples. The second worst thing would be to convince yourself you could afford a new home in time, once you get that promotion, or once your private business starts paying off.

Photo Credit: Flickr

4. Research financing options – Can I apply for the First Home Owners Grant?

First-time homeowners have many financing options - the First Home Owner Grant is a $10,000 payment from the Australian Government, a grant one doesn’t need to repay or pay interest on. How to apply for it? An authorised agency can help you check if you are eligible, deal with documentations and proceed your request faster; apply for it early, at the same time you are applying for your home loan.

5. Decide on the best investment – Do I need a home inspection?

You’ve found the perfect home, and you are about to make an offer, still you need to be certain that this is the house you want to buy, the perfect house for the money you are investing, even if it’s a new house – this is where a home inspection comes in. Whether a home inspector finds a problem or not, you need to be confident in your investment. When selecting your home inspector talk to trusted people, or turn to an authorised trustworthy agency.

6. Understand the buying process, then close the deal, or move on – Should I hire a solicitor?

With only a few papers that are standing away from your first property, you need to understand what you are signing and make sure everything is according to law. Seek help from your real estate agent or mortgage broker, or hire a good solicitor who will check warranties, contracts and other documents. If you don’t understand something, do not be shy to ask - only a few wrong keystrokes make a huge difference.

Buying your first home is a big leap – be certain you have found a perfect one.
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