06 Oct 3 Tips for Buying Your First Home
With interest rates at record low levels, there have been ever-increasing levels of interest from first home buyers who are now looking at purchasing a home.
For many people who are currently renting, it is now a situation where the cost of buying is very similar to what they might be paying in rent.
If you think you might be in a similar situation where your rent would likely cover any mortgage payments, then the first thing to do is to speak to a mortgage broker in Melbourne who can look at your situation and help you move forward.
There are three key areas to you’ll need to examine closely with your mortgage broker before you can really get serious about searching for a property.
What’s Your Deposit?
Understanding how much you have to spend is something that catches a lot of first home buyers out. It’s also an area where a mortgage broker in Melbourne can really assist you.
Many home buyers never get started because they incorrectly believe they don’t have enough money to purchase a property.
Generally speaking, banks do want to see a 20% deposit in genuine savings before they will lend you the balance.
However, for first home buyers – the situation is very different.
There are a range of low-deposit home loan options which when combined with some Government incentives can mean that a lot of people can actually buy right now.
You can access loans such as guarantor loans which will allow you to effectively borrow 100% if you can still service the payments. Combine that type of loan with stamp duty exemptions and the first homeowners grant and that puts you in a strong position to get started.
In reality, if you are able to come up with a 5-10% deposit, there will likely be a range of options for you to get started buying your first home.
Pre-Approval
Once your mortgage broker in Melbourne has looked at your options based on your current savings, you can then look at getting pre-approved.
This is an important step as it gives you clarity around exactly how much you can borrow.
Your ability to service a loan combines your income and expenses and banks will need to see that you have enough capacity to make your loan repayments.
At the same time, your mortgage broker in Melbourne can also ensure your credit score is acceptable and that all the paperwork that is needed is up to date.
A pre-approval is also a useful tool you can use when speaking with a sales agent and gives them clarity that you are a serious buyer.
Total Costs
Unfortunately, the price you pay for your home is rarely how much you will need to spend, so once again you need to get a clear idea of the total costs that will be involved.
While things like stamp duty might not be applicable if you’re a first home buyer in certain situations, there are other costs such as settlement fees, building and pest inspections and loan establishment fees that you will need to take into account.
You could also find yourself in a situation where you need to pay Lenders Mortgage Insurance if you don’t have a 20% deposit and don’t qualify for something like the First Home Loan Deposit Scheme.
You mortgage broker in Melbourne will likely give you a very clear breakdown of all the costs you will need to pay and how much you could ultimately spend.
While this all sounds like a lot of work, that’s what mortgage brokers do. They make your life a lot easier so you can go out and find a home.
If you’re a first home buyer looking to get into a home of your own please get in touch on 0488 814 148 and we’ll assess your situation and see what your options are to get started.
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