Tips for First Home Buyers in Australia
Buying your first property is an overwhelming process. With so many major decisions like how do I get a home loan, who should I speak to not to mention there are new terminologies to be learned, processes that you never knew existed.
What about first home owners grants, what are they? Do I qualify and how do I apply?
Tips for first home buyers
To ensure you do not miss out on what you are eligible for and to help give confidence to first home buyers, the following tips could be of great help:
1. Consider a mortgage broker. A mortgage broker is there to help you find the right home loan for your situation. Since this is your first home loan, a mortage broker can show you the ropes and explain all the features available.
2. Plan your budget. There is nothing more important than planning a workable budget and sticking to it when contemplating buying your first home, as well as continuing with a revised edition once you have successfully pocketed the keys. It will be through sticking to a budget that you will get to understand how much you will be able to afford each week once you get down to organising your home loan.
3. Know your limitations. Whatever you do, do not buy what you cant afford. It is easy to convince yourself that you will only have to struggle for a couple of years and then everything will be alright once your promotion comes along. What if something were to happen in the meantime, or the promotion never came. You could stand to lose everything and you will not have the benefit of the First Home Owner Grant and any other first home buyer incentives the second time around.
4. Save the biggest deposit that you can put together. The saving of a deposit will help you in two ways. First it will show your potential lender that you can exercise financial discipline over a period of time and secondly the bigger the deposit the larger the equity you have in the property right from the start. This means you will pay less interest. One of the best ways to do may be to take out a high interest savings account.
5. Apply for the First Home Owner Grant early. The most appropriate time to apply for the First Home Owner Grant is at the same time you apply for your home loan. You can lodge your grant application through most lenders, if they are an authorised agent and able to receive it. If you do this it will be processed faster than if you had sent it directly to your relevant State or Territory Revenue Office, the government authority that administers it. In most cases if you do this the grant will be processed by the time of settlement or if you are building, by the time your lender will be paying over the first scheduled construction loan payment If you miss out you will still have 12 months from settlement, or from the completion of the building, to do so. Even then, in special circumstances, the commissioner can extend this time limit further.
6. Rid yourself of excess debt. Do not make the mistake of applying for your first home loan while you are carrying excessive debt. Do away with any credit cards you do not really need, finish off you car payments, even sell it if you have to and buy a cheaper car. Make your home loan your top priority. It is also a good idea to factor in any potential interest rate increases to see where it would leave you.
7. Be a cynical buyer. Do not necessarily believe all you are told. Make sure you carry out thorough building and pest inspections and find out what prices similar houses are selling for in the same locality. If you do your research properly you should be pretty right.
8. Make certain you receive all that you are eligible to receive. The various state and territory governments also offer their own incentives to first home buyers in the way of grants of their own, as well as waiving or giving generous concessions off the costs of stamp duty imposts. Make sure you know what is available in the locality you are buying your first home.