Purchasing your first home is a huge investment, not only financially but also in terms of your future quality of life. Whilst it is important to be informed on all aspects of where your money is going, deciding on the type of house you want, and researching the future community you will be living in, are also crucial elements in your decision. We have collated the best advice for First Home Buyers to ensure you don’t miss a thing.
Applying for a home loan
Before you consider applying for a home loan, check you are eligible. In Australia you must be aged 18 and over, a citizen or permanent resident, or married or in a de facto relationship with someone who fits the criteria.
Invest in the best
Work with experienced professionals to ensure you get the best possible advice and support. This includes: brokers, builders, property developers and real estate agents. Brokers must be licensed – you can check this on ASIC’s (Australian Securities and Investment Commission) online register. It is recommended you deal with a licensed company or person and ask questions to know where you stand. What commissions do they get, if any? Will they be charging a fee? There are multiple lenders; ensure you shop around for the best option which meets your needs.
First Home Owner Grant of $10,000
Look for down payment assistance such as grants and other programs. You can receive the First Home Owner Grant of $10,000 if the value of your home is equal or less than $750,000. To be eligible, the home must not have been previously sold or occupied. You will have to pay stamp duty on your purchase but there are also exemptions and concessions for these. Find out more information about the First Home Owner Grant at https://www.sro.vic.gov.au/first-home-owner.
Know your credit
Check your credit score and improve it, if possible, as this will show lenders what type of borrower you are and they are more likely to approve your loan application. Your credit score is based on: your amount of available credit; credit card limits; overdraft protection amounts; other lines of credit you have; and how much you use. In terms of a percentage, your credit should ideally be 30 percent or lower.
Work out your budget
Plan out your budget for when you own a home. How much do you need for utilities, food, and other necessities, as well as the repayments? Work out what you can afford, especially if interest rates go up. It is better to err on the side of caution and make realistic estimates.
Do your due diligence
There are other processes you can undertake to safeguard your money and time when buying your first home. Acquiring pre-approval for a loan gives you an idea of your maximum purchase price and if your situation meets lending criteria. That way, if you put down a deposit after winning an auction, you won’t waste time applying for a mortgage that may be declined. Pre-approvals can range from a fillable online form which takes a few minutes, to a formal document written and signed by you and the lender. They can’t be relied on completely but they are a good starting point. Furthermore, if you are purchasing an existing home, we recommend hiring a licensed building inspector to check the quality of the house and for any issues before you purchase.
Go for a drive or a walk
Get in the car and go for a drive. Stop at the towns where you can envisage yourself living in. What do they have to offer and what are your negotiables and non-negotiables? Some aspects to tick off are: reliable health care providers, public transport options, local amenities, schools, childcare, recreational areas and playgrounds. Think of what the future years will entail for you when you make your considerations. You may even like to stay a weekend or rent in a particular area to help narrow down your choice.
Talk to locals
For a more thorough idea of a town or suburb, go for a stroll, walk your dog, speak to locals, and join local Facebook groups. What opportunities are there in the community for you and your family? What is the overall feel of the town? Don’t be afraid to chat to locals to get an authentic testimonial.
Job opportunities
Investigate job opportunities in your potential new home town. Are there employment vacancies, could you commute to your current job or are work from home options available to you? Depending on your occupation, some or all of these may be available to you. Alternatively, you may see a need for a specific business in the town. Is it time for a change in career as well as lifestyle?
A home to meet your needs
Buying or building your first home is an exciting opportunity and a delicate balance of what you want and what you can afford. Be realistic about the number and size of rooms your home needs. Is a big backyard important to you, or an entertainment area? Consider the upkeep of your home and garden once built. Do you have the time or the inclination to maintain it? Are there any cost saving options you can make or aspects you can forgo now and add in at a later date. What are deal breakers and negotiables?
Gather ideas from various sources
Visit display homes from various builders to get an idea of what designs and colour schemes you like as well as what works well together. This will also give you an indication of which builders’ styles you prefer. Consider if the design plans you like – will they suit the size and orientation of your block? It is also worth asking for advice from friends or family who have bought or built recently. What would they include or not include if they went through the process again? Often, we just don’t have a true idea of certain aspects of a home until we are living in it, such as the amount and placement of power points.
Find out estate, property and building specifications
There could be lending restrictions on certain properties and suburbs, and sometimes the estate you build in may have specific style guidelines. This is generally to create a neighbourhood of high-quality builds which is also consistent and in keeping with the character of the area. If your block is sloping or difficult to access, keep in mind that this could incur extra site costs. Finally, is your lot titled? You cannot build unless it is. If you sign up with a builder you may be locked into particular build start and end dates, so it is advisable to wait for the confirmation of your lot title before entering into a contract.
Consider landscaping and garden
When building a home, it may be easy to overlook the landscaping of your front and back gardens. Have an idea of what you would like, how much money you would like to spend and what purpose these areas will have. Are you an avid gardener? Would you like something low maintenance? Will there be space for relaxing, practising sports or growing vegetables? Even if you aren’t planning on finishing this part of your property straight away, it is good to have an idea for the future so the ground can be prepared accordingly or adequate room allocated for the project.
If you have any further questions regarding purchasing land and building at Kyneton on Riverside, please get in contact with one of our staff members.
Resources
https://www.sro.vic.gov.au/first-home-owner
https://www.urban.com.au/guides/how-to-settle-into-your-new-neighbourhood
https://www.domain.com.au/sponsor/20-things-every-first-home-buyer-needs-know/
https://www.finder.com.au/tips-for-first-home-buyers-in-australia
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