Firsts are always exciting. Your first love. Your first job. Your first home!
Whether you want to move out of your parents’ home for the first time or buy a place to start your own family, buying your first home is a big accomplishment. And who wouldn’t be excited about going home shopping and decorating your own space? However, buying your first home is probably one of the biggest financial decisions you’ll need to make, so you need a lot of preparation and thinking to do. Money matters are also just one aspect of the many intimidating things surrounding home buying. Do you know what else you should prepare and expect when getting your first home?
Buying a new home should not be something to rush. Before you look for a house agent to help you in the buying process, check out some key considerations first so you’ll have an idea of what you’re getting yourself into.
Things to Consider Before Buying Your First Home
Consider your long-term goals
Buying your first home is more than looking for home ideas and home inspirations. It should involve thinking about your long-term goals. Why are you getting a new house? Do you plan to make it a rental house? Or is it a space where you want to build your family?
If you’re planning to buy with your spouse, you should discuss what or where you see yourselves in the next 5-10 years or more and make sure these are considered. If you’re buying by yourself, you should also make your thoughts clear by listing down things. Thinking about your long-term goals can help you decide what kind of house you want or where you want to buy it. It can also help you assess if it’s the right time to buy or you need to focus on other priorities first.
Think about your personal circumstances
Getting a house is a commitment. You’ll have a mortgage that can take 30 years to pay. Are you ready to commit to this area? Are you ready for a new lifestyle and to spend on home maintenance? From maintenance to insurance, owning a home is expensive. If your HVAC system breaks down, there’s no landlord to call for repair. You will need to handle it by yourself – maybe not the actual repair but the financial burden that goes with it.
How about your work? Is there a chance that you might need to move for work in the next few years? Unless you plan to live in your home for at least 5 years, you might not be able to recoup the expenses associated with buying and then selling your house later. In addition to your long-term goals, these personal circumstances are also considerations that you need to think about.
Check your finances
If you’re decided about buying a house, then you should do a serious assessment of your financial status. How’s your financial health? The result of your assessment will tell you whether you’re ready to go home shopping or if you need to do more financial preparation.
In Australia, the minimum required deposit is 10%, but having 20% of the purchase price of the house is a great savings goal. You also need to consider the other upfront costs included in the house buying process. In addition to the deposit, there are the mortgage repayments, living costs, repair and maintenance costs, as well as other fees and rates. All of these are associated with the costs of owning a home. Can you afford them?
So, before you click through pages of online listings, review your spending and look at your savings. Doing so will help you know how much you can allocate to mortgage payment or if you have enough savings to cover the down payment. Buy the house that you know you can afford.
Know your financial options
If you don’t have enough cash for down payment, you should research other financial options like government-sponsored benefits, such as the First Home Owners Grant or the First Home Loan Deposit Scheme. Check for their eligibility criteria and see if you are qualified.
Moreover, when assessing your financial health, you should also check your credit. Will you qualify for a home loan? A good credit and on-time payment history can give you better loan terms and options. Or do you have other property you can use as security for a home loan?
You can also consider getting pre-approved to know how much you’ll be able to borrow. This will guide you in your home search because you know your purchasing power or how much you can offer on the home you want. Pre-approval also gives buyers agents the confidence to shop for you as they know you are a serious buyer, and they can make offers on your behalf.
List down what you want
Do you have any idea of what type of home you want? How many rooms do you want in it? Before you start looking for houses, list down your preferences first. This will make it easy for you or your real estate agent to shop around and find a match. Among the types of home you’ll see in the real estate market are single-family homes, duplexes, townhouses and apartment units.
You may also consider researching where you want to live and check neighbourhoods to see if you can get what you want in terms of the following:
- Proximity to amenities
- Nearby schools if you have kids
- Property taxes
Find a reliable real estate agent
There are many real estate agents who can help you find a house that matches what you have in your list. However, always opt for a trusted agent who can protect your interest and guide you well through the buying process. Such a professional can assist you from locating homes that meet your needs to negotiating the price, completing paperwork and scheduling home inspections. Their expertise can also protect you from any pitfalls you might experience during the process.
Are you ready?
When you have done your groundwork above, you will be ready to shop for your new home with so much confidence. You know your goals, your finances are in order and you have a trusted real estate agent with you. However, still, take the time you need to do and think of what’s best for you and your family. It’s better than rushing the process of buying your first home.