Basic Steps to Purchasing your First Home 

Purchasing your First Home

Amongst all important decisions, Purchasing your First Home is the biggest and most serious financial step that an individual can undertake. To avoid a web of negative experiences, you need time to prepare so that the home becomes a blessing. You can face stressful and exhilarating moments in acquiring the first home. But if you have the right information that is highlighted, you will have the confidence to close any deal in any state in Australia.  

Examine if you are ready for the home

It is always prudent to ensure it is the right time to buy a home. Renting is the best option unless you intend to live in the home for more than 5 years. Remember that home ownership is a bit expensive as compared to renting. You will be responsible for all costs like paying for repairs or utility costs such as water and garbage. You will also need to cater for other costs related to the home you are occupying like insurance and taxes. Thus, it is possible to end up in a miserable position if you are not prepared financially to cater for such costs. Although it appreciates over time, buy a house not as an investment but when you need a home. Just wait for the right time even if family or friends pressure you.  

Secure a mortgage

It is very discouraging to find the home you were dreaming about and later to find out that you are not financially able to purchase it. Before you enter into any real estate deal, ensure that you have a sustainable income, adequate cash, and good credit to guarantee that you are financially able to acquire the home. Take enough time to shop for your mortgage and avoid last minute so that you don’t lose your dream home to another bidder on account of financing. You will require undergoing a pre-approval process which is usually free.  

Select the right vehicles for savings

Don’t assume the power of savings building society and bank saving accounts give adequate security with low rates of interest. There are also several saving schemes that you can examine. Savings with the right channels ensure that you can effectively amass the requisite resources. So, make sure you analyze the available saving channels around your state in Australia to see which one fits your needs.  

Get quality and beneficial loan types and payment options

Various loan types and payment options related to a mortgage exist that you can comfortably choose. In order get a low rate of a loan, you should try to get a fixed rate loan that has a period of 15 to 20 years. You can also cover your down payment with creative financing. Remember, you want to purchase a home that can increase your wealth, hence, be careful about the choices you make. You may hurt yourself financially if you make poor and wrong choices. You might land in trouble with your mortgage by being owed more than the house worth in case you move sooner than expected or the market prices drop. You can ease the selling and avoid such circumstances when you need to move through putting a down payment.  

Know what you can afford

You need to be honest and determine the home you can afford at present.  A range between 25 to 30 % of your disposable income is a good rule of the thumb in home acquisition as it will assist you to balance your mortgage with necessary insurances and taxes. Some experts suggest that the cost of the home ought to be limited to an amount that equals 2.5 times the annual salary. Leave alone retirement purpose; It would look creepy when you spend a lot of the mortgage and not be able to cater for the daily obligations. If you have pending debts, ensure that you pay even a lesser amount of the house payments. It will give your mind peace if you settle for a smaller house than a bigger house with skyrocketing costs.  

Get a professional realtor

You can go ahead and search for a good realtor after you have determined and been pre-approved the much you can spend. The realtor will take time to understand your needs and wants carefully. Later, the realtor will give an explanation or recommendations on the affordable home that caters to your needs. After listening to you, the professional will offer you various diverse options. When you get the offer, the expert ought to assist you in the negotiation of the favorable terms. If you find it hard to find a good realtor, let your colleagues and friends assist you.  

Carry out a home inspection

A home inspection is a crucial step different from an appraisal. Hire a home inspector to check for hidden problems in the home. Issues that may affect the decision of purchasing the home can come out from such an inspection. For instance, the house may have a bad roof, foundation problems, mold problems or even termites. You will be able to save thousands in repair and negotiate a lower price if your home has a problem. Even if the homeowner assures you that inspection has been done, an independent home inspection will help iron out things. An independent inspector will also examine and clear out things in case the realtor is on the side of the seller of the property. Therefore, you will save a lot of resources if you find a good inspector.  

Be ready to move in

Once you have reached a deal on your home, prepare to move in swiftly. You can take time to paint and beautify your home so that it is ready for occupation. Make sure the existing address is changed to reflect your bank account and other necessary accounts. You can also cancel old utilities as you set up new ones. In that way, you will avoid being late on fees payment and therefore save money and time. If you can effectively transfer the old accounts to be in concurrent with the new address, some companies may provide you an installation fees waiver. As you move in make sure that certain things are taken care of;

  • Include Homeowner’s insurance and taxes to your monthly housing expenses. Additionally, when all the monthly costs inclusive of taxes and insurance are accounted for, they ought to be less than 30% of the monthly salary you earn.
  • You may not be ready to buy a home if you are not saving for closing costs. It is wise to prepare for necessary closing costs beforehand to avoid facing difficulty.
  • Ensure that you can comfortably cater for necessary home payments. Build a budget for the expected home payment and have some extra savings to support the payment. In that way, you will have the confidence that you have enough resources to afford your home.