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Buying a home is both exciting and nerve-wracking. It is a major decision that takes planning and research, and careful budgeting. Here are some tips to help you get started.
You are ready to become a homeowner if you have the following things in place:
A substantial deposit—The bigger the better when you’re saving for a home. (As a rough guide, aim to save 20% of the purchase price plus enough to cover costs.)
A regular savings habit—A solid track record of employment and a history of regular savings in your bank account will make it easier for you to get a home loan.
Pre-approval for a loan—Compare a few different loans before you decide. Ask your lender for a key facts sheet on each home loan so you can compare more easily. Once you pick the loan you’ll know what the repayments will be and how much you can afford to spend on a property.
Some additional savings—These will act as a buffer if interest rates rise and your repayments increase.
How much can you afford?
A good way to find out how much you can afford to spend on a property is to review your household budget. If you don’t already have one, use our budget planner to:
Finding the right property
There’s no point looking for a waterfront mansion if you can only afford a boatshed. Once you’ve set your price range, identify the suburbs that have properties in that range – it will save you a lot of legwork. Go to the Australian Property Monitors: Home Price Guide to see property prices in different suburbs.
Then comes the fun part: finding the house or unit you want. Take your time and consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs?
Before you buy, arrange for building and pest inspections, and have the contract checked by a conveyancer or solicitor before you sign. Make sure the person inspecting your future home is qualified to do so, such as a licensed builder, architect or surveyor.
In some states you can also have inspections during the ‘cooling-off period’, or the 5 days after you sign the contract, as long as you don’t buy at auction – where there is no cooling-off period – and you’re prepared to lose part of your deposit if you withdraw during the period.
Buying a home can feel like a giant leap into the unknown, but there are plenty of things you can do to make sure you don’t fall into a financial abyss. Keep to your budget, put some money aside for emergencies, and take your time to find a place that feels like home.