July 26, 2017
#1 Get your finances in order
Lenders will look at your credit history and any existing debts when assessing your ability to make repayments. For credit cards, they look at the limit on the card so consider whether you need the full existing limit (and that 'emergency' card) and also think about paying down any loans. Continuity of income is important - most lenders like to see at least 6 months in a current role and look for a three-year employment history.
#2 Research, research, research
Find out about suburbs that you are interested in. What's the public transport like, what are the historic property trends and what are the forecasts. Look for median prices that fit your budget. Sites like domain.com.au and realestate.com.au have free summaries for each suburb and Consumer Affairs Victoria has lots of information and tips about the home buying process.
#3 Bite the bullet and budget!
Saving for a deposit is crucial - lenders want to see evidence of 5% of the purchase price in 'genuine savings' (savings held or accumulated over three months). The bigger the deposit the more choice of lender and offers you will have so it pays to save. It's hard work but the key is to start (every journey starts with a single step as they say), make a plan and stick with it. Use sites like ASIC's Money Smart for tips and tools.
#4 Consider your options and crunch the numbers
To get that foot on the property ladder may mean compromising on where you buy. If you can't bear to be away from your favourite coffee haunts or want to be close to work, one option to consider may be rent-vesting. Continuing to rent in your favourite suburb while buying an investment property in a more affordable area might be the answer. There are good calculators available online that will help you work out if this is the option for you.
#5 Get a pre-approval
Take the guesswork out and bid with confidence. A pre-approval is confirmation that you can borrow up to a certain amount. When you buy a property you then convert to a full approval and supply details of the property. Pre-approvals generally last for 90 days and can be extended.
#6 Take the time to understand how buying a property works
Auctions are high pressure occasions and it is crucial to not get carried away in the heat of the moment. Take some time to attend auctions and get a feel for how they work. Also, don’t forget that private sales are how most homes in Victoria are actually sold. A private sale can work to a buyer's advantage because it removes the pressure of an auction that can drive prices up.
#7 Don't forget moving costs
It's a good idea to make some allowance for important additional costs of buying a property such as a good house and pest inspection to make sure there are no hidden surprises. Also moving costs and potentially furniture for those additional spaces.
# 8 Buy with your head and your heart
Everyone wants the perfect home - it's natural. Often though the first step means some compromises to get that first property. Developing a list of what's not negotiable and what's nice to have can help to narrow down your search. Looking for opportunities through strategic renovations can build equity and help you towards that dream home
#9 Narrow down the choices
Targeting some key suburbs is really important - there are only so many open for inspections you can attend. Use questions like these to identify your targets - is it affordable and in line with my lifestyle, does it have the right infrastructure - transport, school zones etc and does the data show growth potential
#10 Get organised and take the pain out of inspections
Finding the right home takes time and a lot of weekends spent driving to and from inspections. It's not easy, but downloading good property apps and defining your search criteria well, means that you can get push notifications of new properties and sync inspection times with your calendar and gps. This can help keep you calm in a stressful time and make your search more productive.
Contact me today for a free no-obligation review of your options to get you into your dream first home - 0412 973 386, firstname.lastname@example.org