Key Factors for First-Time Homebuyers
Buying your first home is an exciting milestone, but it can be overwhelming. Here are key factors to consider, according to the experts at YES Real Estate.
1. Understanding Your Financial Capacity
Before starting your home search, it's crucial to assess your budget and borrowing capacity. Lenders evaluate various factors like income, expenses, assets, and credit history to determine the loan amount you can afford.
2. Obtain Pre-Approval Before Starting Your Search
Obtaining a pre-approval from your chosen lender allows you to find a property that aligns with your budget, preferred location, and desired amenities. Create a checklist of essential and desirable features such as property size, number of bedrooms, backyard, and proximity to amenities like schools, shops, parks, and public transport. Also, consider any future lifestyle changes you anticipate, such as starting a family.
3. Building or Buying Your First Home
Deciding between building a new home or buying an existing property is a crucial consideration. Building allows you to have a home tailored to your preferences, but it takes time and careful selection of a reputable builder or developer. If you choose a house and land package, evaluate the location to ensure it aligns with your desired lifestyle, including the design of houses, streetscapes, and nearby parklands. Buying an existing property offers convenience and a quicker process but may require compromise on specific preferences.
4. Apartment or House
Deciding between an apartment and a house often boils down to your priorities: space or location? For instance, if you desire to live in a bustling city center where houses are scarce and pricey, an apartment might be perfect. Conversely, if you're planning to raise a family, a spacious house in a suburban neighborhood might be more appealing.
5. Save for a Deposit
When you've found a property you like, aim to save a deposit of 20% to avoid paying lender's mortgage insurance. Create a budget to set aside money regularly and consider options like a savings account, term deposit, or utilizing the First Home Super Saver Scheme. If affordability is a concern, explore the Victorian Homebuyer Fund.
6. First Home Owner Grant Eligibility
As a first home buyer, accessing grants and concessions can make a significant difference in your ability to afford a home. The First Home Owner Grant (FHOG) is a government scheme designed to assist with purchasing or building a residential property. In Victoria, it offers a one-time payment of $10,000 applied directly to your home loan at settlement. Note that the FHOG is not available for investment properties.
7. Stamp Duty Concession or Exemption
Stamp duty is a significant upfront cost when buying a property, but first home buyers can benefit from concessions and exemptions. The rates and eligibility criteria vary based on the property type and value.
8. Principal Place of Residence (PPR) Concession
Victorians who purchase a new or established property valued up to $550,000 can qualify for a PPR duty concession. To be eligible, you must plan to move in within 12 months and make it your primary residence for at least a year.
9. Consider Hidden Costs
Be aware of the additional costs involved in buying a home, such as lenders mortgage insurance, loan fees, conveyancing fees, building inspections, insurance, rates adjustment, utilities connection, moving costs, and any desired changes or fix-ups.
10. Partner With the Right Agent
Choosing the right buyer's agent can streamline the home buying process. They can help find suitable properties, determine fair prices, handle inspections and due diligence, negotiate or bid at auctions, and manage the sale and settlement process, acting as a liaison between all parties involved.
You can always partner with YES Real Estate for expert guidance on buying a first home.
