Despite spiralling house prices, plenty of first home buyers in Australia are still determined to acquire their first home.
If you want to get on the property ladder, ensure you do your homework before you commit – avoiding the heartache of buying the wrong property, getting stuck in a bad area, or perhaps even defaulting on your home loan.
So what are the main factors you need to consider when buying your first home? Here’s a basic checklist.
What are your lifestyle needs?
What sort of lifestyle do you want to have? Are you a couple, a single or a family? Do you value city life or suburban calm? A large garden, pocket courtyard or balcony?
Many an unwary buyer has ended up spending their weekends mowing the lawn and nature strip when they’d far rather be checking out the shops. And it’s easy to get carried away by a smart, pocket-sized apartment which turns out to be a nightmare to actually live in.
Draw up a list detailing the size, location, style, look and type of accommodation you are really looking for.
What can you realistically afford?
Don’t over-stretch and think the better job you’ll get ‘next year’ will pay a hefty mortgage. Live within your means. Even if you’re a couple just about managing now, what will happen if you have children or one of you loses a job?
If you really want that bigger house or slightly better area, compromise on the state of the property you buy. Consider a scruffy renovator you can add value to, especially if it’s close to good public transport links and infrastructure such as schools. It might not be as much fun to live in first-off, but you can add value over time without paying for someone else’s fancy finishes.
What are the hidden costs?
Don’t just factor in mortgage payments when considering your first home. You might be in for a rude shock when all the extras drop in. Stamp duty, conveyancing costs and agent fees run into thousands of dollars. And once you start living in the home, there’s no landlord to fix your pipes or replace the carpet – you are responsible for all ongoing maintenance and repairs.
Rates will be payable on a house, and body corporate fees on an apartment. Not to mention insurance for the structure of the building as well as its contents.
Do you qualify for a home loan?
It’s no good launching into your house hunt before getting watertight finance in place. You need to compare loan products and talk to banks, or consider a broker to help you get the best deal for your circumstances.
You’ve also got far greater bargaining power if your finances are firmly in place before you start looking. An unconditional offer removes doubt in the vendor’s mind and makes you stand out from the crowd. You also know exactly how much you can offer for any given property.
Is this home right for me?
You’ve started attending Open for Inspections, and all those jolly estate agents are determined you’ll buy their property. It’s crucial you don’t get swayed by agent-speak and stay focused on the task in hand – finding a property which fits all the lifestyle criteria you’ve identified on your list.
If you’ve decided on a house in a certain price bracket, don’t be tempted to check out the more expensive ones ‘just in case’. You might get sweet-talked into stretching your finances in a dangerous way.
Are building inspections in Melbourne or Sydney really necessary?
Yes they are. Cosmetic changes are do-able. It’s the things you can’t see like pest infestation and shaky foundations that catch people out. Many a new paint job has tried to cover up tell-tale cracks, or dodgy timber.
Don’t get caught out – cover all the bases with building inspections in Melbourne or Sydney. It’s vital to have that peace of mind before such a huge spend.
Happy house hunting! It can be an exciting and rewarding experience when you’ve done your homework, and you’re armed with all the right information.
By Darel McBride
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