For first home buyers, jumping into the home owner world for the first time can be both nerve wracking and exciting. There’s lots to consider and everyone has some advice to impart from their own experience or as experts in the field.
At the end of the day, the decision has to feel right for you but there are a few things to consider before you jump in head first.
What kind of home do you want?
Do you want to live in a brand new home or purchase from a seller on the market? A house and land package can be a great option for first home buyers since it’s a package price and can be customised to suit individual taste and lifestyle needs. Do you even want to live in a house or need so much space? Maybe a unit or townhouse is a better option for you. Consider your current lifestyle and then plan ahead for a few years as well—you might be living in your new home for a number of years or perhaps it’s solely an investment property that brings a whole new set of considerations.
When budgeting, consider the additional expenses.
There are additional expenses associated with buying a home for first home buyers on top of the price tag, many of which can’t be avoided. If you’re buying an existing home, you’ll need to get a building and pest inspection that can cost around $500. You’ll also need to account for legal fees (approximately $800-several thousand) and insurance that most lenders require to safeguard your property including flood, fire and other disasters. Additionally, if you’re borrowing over 80% of the value of the property, you’ll be required to take out lenders mortgage insurance. While this can be factored into your loan it can still run into the thousands.
Shop around for a home loan.
As a first home buyer, never is there a more important time to do research than when looking for a home loan. Lenders may hook you in with low interest rates and sting you with higher fees. Always look at the package in its entirety and compare all aspects to other loan packages to make sure you’re not losing out somewhere else. Ask lenders for a key fact sheet to easily compare and perhaps consider speaking with a financial advisor who can assess your finances and help you decide which features will best suit your needs.