Tips and Tricks for First Home Buyers

Buying your first home is an equal mix of excitement and fear – the idea of owning your own home, painting the walls whatever colour you like, and not having to deal with rent increases is fantastic. On the flip side, the thought of having to go to open home after open home, finding the perfect house, and then missing out is enough to put anyone off.

We've put together some tips and tricks for those looking to buy their first home to help you out.

Do You Qualify for a Home Loan?
As exciting as the prospect of looking for a home is, the first step before you get too involved is finding out if you qualify for a home loan and how much you could get approved for. For those looking for a single source of information, a broker can do the figures and let you know how much you could borrow. For those who prefer to do the leg work, speaking to several lenders to get an idea of how much you could borrow is important.

It is key to remember that while a lender may have low advertised rates, that lender may not be the best option for you right now. 

Get Rid of Debt
While your personal debts may be under control, it may be harder to get a home loan approved or to get a loan for as much as you would like/need. Spend some time paying off any debts you have, particularly large or high interest debts. This might mean consolidating credit cards, or loans into one to pay it off quicker.
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If you aren’t sure which debt will work against you, chat with your broker or chosen lender.

Photo by Towfiqu Barbhuiya on Unsplash

Decide on a Deposit You’re Comfortable With
Traditionally, a 20% was the most beneficial choice as it meant there was no requirement to pay lenders mortgage insurance (LMI). With the introduction of the First Home Loan Deposit Scheme (FHLDS), eligible first home buyers can purchase with just a 5% deposit with no LMI.

This sounds great and may mean you can get into the market quicker; however, it is also wise to remember that it means you have a higher loan and therefore higher loan repayments. With the expected increase in interest rates, it’s worth considering whether you will be advantaged or disadvantaged by having a higher deposit.

Research Any Grants Available
There are often other grants available for first home buyers, whether it be through the relevant Governments or through builders if you are looking to buy a house and land package. These grants could be worth thousands of dollars towards your property purchase.

It’s essential to understand the eligibility of these grants – some grants are only ever available once, and if you don’t use them to purchase your first home, you may not be eligible in the future.

New Build or Existing Build
Part of doing the research into buying a new home should be thinking about your “must-haves” and your “nice-to-haves”. Some people are happy to forgo any grants and purchase an established home in an older area as it may suit their family better, while other buyers prefer the idea of being able to design their home the way they want it, and therefore buying a house and land package or even off-the-plan is a better idea.
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Don’t dismiss one in pursuit of the other – while you may think an established house is what you want, a brand-new home could provide a better location and more modern fixtures. On the other hand, an established home may be in an area that already has facilities built and has a larger land size that suits your family.

Adjust Your Expectations
You probably hear it all the time but adjusting your expectations may help you get into your first home sooner. This could be rethinking prices and understanding that homes are selling for more than you think they should; or it could be about buying a home that suits you for the next few years, and gets your foot in the door, over buying your forever home which may take another two to three years to save up the deposit.

​Buying a home should be an exciting time. Spending the time getting finances in order and considering what you actually need in a home may see you purchasing a lot sooner than you thought. 
 
Are you looking for a new home in NSW? 1-, 2- and 3-bedroom apartments in Montane Kellyville are now selling and proving popular with first home buyers. Find out more today