3 tips for first-time home buyers to get on the market as soon as possible

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You’ve probably mentally decided on the paint color for your bedroom walls and searched for new sofas for months or even years.

To help first-time home buyers realize their dream of buying your own home, we’ve compiled these top tips:

1. Sort out your debt

If you have personal debt, you may have a harder time getting a home loan or you may not be able to borrow as much as you would like.

This is because banks want to make sure that you can afford all of your financial obligations. If you have more debt, they fear that you will have trouble paying those repayments and your mortgage as well.

What can you do there?

Focus on paying off all large and/or unsecured debts before applying for a home loan, especially high-interest debt. If you have a few personal loans, credit cards, and/or car financing, consider consolidating those debts.

Did you know?

Some debt, such as HECS college debt, is much less of a concern to a lender than unsecured debt such as credit cards, so create a plan to pay off the highest-interest debt first.

See how much you can afford to borrow


2. Determine if you qualify for free money

All property buyers have to pay stamp duty in Australia, but if you’re a first-time home buyer, you may be eligible for a concession.

Depending on where you live and the type of property you are buying (established or new), you could even or even get a full exemption.

These can represent savings of up to tens of thousands of dollars.

What can you do there?

Find out what stamp duty rebates, concessions, and exemptions apply in your state or territory.

Did you know?

Purchase price caps or limits apply when it comes to the value of the property you are buying, so make sure you are aware of them before you start buying a property.

Find out how much stamp duty reduction or exemption is for you


3. Find out your financing options

The home loan market is complex and competitive, so it’s a good idea to compare home loans to make sure you get the right rate and features.

There are a number of options – from variable rate loans to fixed rate loans, interest only loans and investment loans – and there are many types of mortgage loans to suit different situations.

But figuring out which one is right for you can be overwhelming.

What can you do there?

Be very clear about your financial situation, including your savings, monthly budget and income. Then use online calculators to determine how much you can borrow. If your situation is complex, consider getting free, personalized advice from a mortgage broker.

Did you know?

If you are self-employed, you may find that some banks see you as too high of a risk, while others are more than willing to lend money. Compare options from different banks and lenders to find one with a policy that suits your specific situation.

Browse all our tips for first-time buyers


Image: Shutterstock

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