Top 5 things First-Home Buyers Need To know

Top 5 things First-Home Buyers Need To know

We understand that buying your first home is an emotional journey. It can be extremely exciting, yet quite daunting at times. With the amount of resources available online and offline, you may be experiencing information overload and not sure where to begin!

Having this in mind, we interviewed Kevin and Rovin, two amazing (and very handsome) finance consultants for their opinion on the top 5 things that FHB need to know.  

1. Think about WHY you want to buy a home

KEVIN: This is the first and foremost question you need to ask yourself. Do you want to live in it or will it be an investment property? Or do you want to do a bit of both. What we have seen is that a large number of young FHB would purchase their first property and live in it for 6 months, then turn it into investment. Is this something you are also thinking?

Depending on you short and long term plans, this can affect the type of loan you apply for and the product selection.

2. Research potential properties and loans

Rovin:  The market is crucial, so do some research on the areas you are targeting, check out auction clearance rates and recent sales, as well as price trends in the area. Once you are aware of what you are looking for and the approximate price, the next step is to do a Borrowing Capacity Check with a finance consultant. Most commonly referred as mortgage brokers.

When FHB come to me, based on their financial information, I will let them know what would be the maximum they can borrow, the typical deposit required and an estimate of their monthly loan repayments.

3. Factor in other costs involved

Kevin: Depending on the property, there can be a number of additional costs, I always give a list of estimated cost of things. This can include, but isn’t limited to, stamp duty, loan establishment fees, legal and conveyance services, utilities, property insurance, maintenance and lenders mortgage insurance.

Depending on the client’s situation, they may need to account for removalist costs, furniture and appliances. Sometimes the client is too excited and forget about those things.

4. Think about your future

Rovin: Just because your current situation allows you to get a home loan, that doesn’t automatically guarantee that you will still be able to service it in five years’ time. Is there a possibility your role at work will change? Are you considering going back to study and reducing your working hours? Are you getting married? Will you be having a baby? All these things will affect your loan servicing.

We ask FHB these questions  and help them avoid being in financial hardship in the future.

5. Get professional help

Kevin: With so many things to consider, getting professional help is highly recommended. There are many experts in the industry, so you don’t have to do it alone. You should have your A Team! They look after your interests, save you MONEY and TIME. The A team is typically your real estate agent, finance consultant and conveyancer/solicitor.  

There are also other professionals such as accountants, quantity surveyor, pest control and so on. Having these people available will help to avoid nasty surprises down the track.

We hope this article is helpful and clears up some of the confusion in buying your first home. Give us a call for expert advice, we are always here to help.

Fun Fact:

Most common age for a FHB is between 25 – 34 years old.

Australian Bureau of Statistics (ABS) 2017-18 Survey of Income and Housing