Ready to take the leap into home ownership? It’s worth doing your homework first.
Buying your own home can be overwhelming – hardly surprising given it represents one of life’s biggest investments. Our buying tips aim to make the whole process a little less daunting – while ensuring you’re thoroughly prepared.
10 things to consider when buying a home
1. Know where you stand
Before you start house hunting, find out how much you can borrow, what you’ll need for the deposit and costs, and whether you qualify for the First Home Owner Grant and other forms of assistance.
2. Don’t overcommit
It can be tempting to borrow the maximum amount available, but make sure you can afford the repayments and consider the impact higher interest rates could have on your household budget.
3. Choose the right savings vehicle
If you need (or want) to save more for the deposit and costs, a cash account may suit if you think you’ll be ready to buy in the next couple of years. If your timeframe is longer – say, five years plus – then you may want to invest in assets with the potential to deliver higher long-term returns, such as shares.
4. Pinpoint your search
When you’re ready to start looking, make sure you decide where you want to live and the type and size of property you want to buy. Also, make sure you consider issues such as proximity to public transport, shopping centres, restaurants, cinemas, childcare, schools and work.
5. Put in the hours
This means attending as many open inspections as you can. It can be very tedious and time is money but compared to the size of the investment, it’s time well spent.
6. Know what you’re buying
When you’ve found something you like, inspect the property thoroughly and consider arranging a building and pest inspection. While these inspections can cost a couple of hundred dollars, they can save thousands of dollars in repairs down the track.
7. Get a formal loan approval
Before making any offers, you should get your loan approved in writing. When deciding which loan to choose, make sure you consider all of the loan’s features as well as the interest rate.
8. Get the contract checked out
A solicitor or conveyancer can review the terms and conditions in the sale contract and your loan agreement. They can also finalise the settlement on your behalf.
9. Arrange appropriate insurances
In addition to insuring your home and contents, you should take out enough personal insurances to cover your debts and income in the event of death, illness and injury.
10. Seek financial advice
A financial adviser can develop strategies to help you save for your deposit and costs, as well as pay off your home loan quickly. They can also review your insurances and help you achieve your other lifestyle and financial goals sooner.