First home buyers are currently generating a great deal of media attention. From debates into housing affordability and a plethora of advertising encouraging the great Australia dream, purchasing your very own place to live is in the minds of millions of Australians today.
Perhaps you began by researching and deciding upon your dream location – inner city, suburbs or by the ocean, only to develop a sinking feeling as the price of past sales in your desired area quash your dream of buying your first home. However getting your foot in the door is a sound strategy for wealth creation and long term financial security, even if the market experiences fluctuations in the shorter term.
So, where to next? Below are some initial steps to follow when beginning the process of buying your first home to make the process less daunting.
Prepare your finances
It sounds obvious, but the process will go much faster if you do your financial homework before approaching lenders who will assist you to determine your borrowing capacity. List your day to day, monthly and yearly expenses. Don’t forget about direct debits, transport costs and other ad hoc costs such as annual gift giving commitments that can be easily overlooked. If you can, track your costs over several months and determine what non essentials can be trimmed back to save extra.
Other straightforward ways to positively impact upon your lending ability can be to pay down your credits cards and cancel as many as you can. You may also choose to drop down the value of your cards, but keep one that you consistently use and pay off to prove you can be trusted with a line of credit.
What sort of house do I want?
Define and order your priorities and you may decide that you need an extra toilet more than extra parking, while others cannot function without a large backyard. This exercise helps you to visualise what you have in mind when inspecting homes and to identify whether they’re currently available on the market in your price range. If not, you may need to consider researching home builders that will realise your specific requirements and options such as dual occupancy home designs that are more cost effective.
Alternatively, you may want to start a new and avoid purchasing an ageing property that requires expensive maintenance, or you simply may not know what home design would work best for you. If you aren’t construction savvy or unfamiliar with the process of selecting a builder, house and land packages can be a great way to enter the market with a variety of designs and an increasing array of customisable options. House and land packages can be particularly suitable if you want to avoid the stress and financial volatility of the auction process.
So get to some open houses and display homes, talk to your home owning peers and get started on organising your finances in order to make the first steps towards buying your first home.