Top Tips When Purchasing a New Home: A Guide for Home Buyers
Buying your first home is not only an exciting time but also a smart investment that has been proven to increase wealth over time. This article seeks to guide you through the process and share top tips when purchasing a new home in Australia!
Know your budget
Knowing your budget before looking at properties is crucial as it sets realistic expectations on what type of property you should be looking at and helps guide your search process. It's not uncommon for people to come across properties they fall in love with but are unable to afford them because they didn't take their budget into consideration beforehand.
Find out your budget by working out how much you can afford to spend every week on your mortgage repayments, then add in the costs of any other expenses such as life insurance and council rates. This will give you an idea of what type of property is realistic for you which should help narrow down your search so it's more manageable.
Make sure the location is right for you
The location of a property can be one of the most important factors when buying a new home as it's likely you'll be living there for years. So make sure before signing on any dotted line, that the neighbourhood is right for you.
Research the local schools, cafes, dog parks, shopping centres and hospitals in the area to make sure they suit your lifestyle and needs.
Consider what type of neighbourhood you want to live in - if you have young children, schools will be an important consideration but also consider public transport options and proximity to work.
If you want to rent it out, rental returns will also depend heavily on how well the property is located, the size and features of the building.
Consider the resale or rental value
Are you looking at reselling your property later on down the track? Or maybe you're planning on purchasing it as an investment property and renting it out?
Even if you don't have immediate plans to do so, resale or rental value can be important to consider when buying a new home.
If you plan on renting out your home it's also incredibly important to find a rental agency with capable property managers who you can trust to find you the right tenants.
Research finance options
Once you know your budget you can start researching more about the types of loans that are available to you and how much each will cost.
One thing people often overlook is their credit score, but it's important because this affects your interest rate which in turn determines what type of repayments you'll be paying for over the life of your loan. Make sure you do a credit check with organisations like Veda or Equifax before applying for any type of finance as it may affect your ability to get approved.
Property finance brokers can also help and guide you to the best home loan solution for your needs. Many people make the mistake of thinking brokers cost you money, when in fact they don't! Brokers get paid commission from banks, so it's definitely something to look into.
Take advantage of first home owner grants
After researching all these things don't forget about first-home owner grants which could help save some money off the price tag! Keep an eye out for state or territory specific discounts too. You may not qualify, but if you do then you could save thousands.
Calculate all extra costs involved
Don't forget about the extra costs! Things like stamp duty, cost for removalists, home loan application and registration fees, council rates and cost for a building and pest inspection report, just to name a few. If it's a new build then you'll also need to factor in construction costs too.
You don't want any nasty surprises come settlement day so make sure you're well prepared for the extra expenses.
Be prepared to make more than one offer, but be careful and stay within your budget
You may need to make more than one offer before you find the property that's right for you. Be certain of your budget and don't make an offer significantly higher than what you can afford or it could come back to bite you later on.
One way to get a feel for how much other people are paying is by looking at real estate websites like Domain, where they'll show recent sales prices in your local area.
Get help from the experts
Don't be afraid to get help from the experts, whether it's a mortgage broker, residential builder or real estate agent. They will be able to offer advice on things like how much you should spend and what features are important to have in a new home.
Buying a new home could be one of the most important decisions in your life so it pays to research all factors before committing or buying too impulsively. Make sure you understand all the costs involved in purchasing a house including finance options, knowing your budget, researching schools etc. and if in doubt, speak to an expert.