August 09, 2017
#11 Consider your options - family guarantee?
If you have the income to make loan repayments but are still struggling to get a deposit together, a family guarantee may be an option. For example, if your parents have equity in their property a portion of this can be used as a security guarantee.
#12 Avoid buyer’s remorse!
Buying a home is an emotional experience and it can be easy to get caught up in the process and not properly evaluate whether this is the right property for you. Compare back to your key priorities and ensure it ticks all the boxes. Inspect the property as many times as you can and ask for a private inspection. Try to visit at different times of the day so you can assess traffic and noise. Make sure the rooms are big enough for your prize furniture.
#13 Navigate the maze of choices.
Like phone plans, home loan features and options continue to multiply and research shows first home buyers can struggle to find the right loan for their needs. Take time to think about what is important to you, do you want to minimise repayments; pay off early; bundle all of your banking; have the flexibility to make additional payments and redraw; minimise interest; allow for maternity/paternity leave payment holidays etc. This will help you identify the two or three key product features you need and narrow down your search.
#14 Is building an option?
Buying a house and land package, or land and then building, has the advantage of you getting a brand-new home designed with your needs in mind. Also, in addition to stamp duty benefits, eligible first home buyers can qualify for the First Home Owner Grant. In Victoria, this is $10,000 (and $20,000 in regional areas) for properties up to $750,000. Building is complex though and it is important to understand the process. Some of the large building companies run information sessions for first home buyers that can help.
#15 Consider your options- sharing?
I know - we've all had the shared house experience - and the goal is your own place. But, if the goal is getting farther away every day, perhaps pooling money with friends or family might be a way of getting into the market. Some lenders offer tailored property share loans. Legal advice to make sure the set-up of the loan is right is a very good idea. Also, an agreed 'exit strategy' in the event that situations change
#16 Get a free credit history report.
When you apply for a loan, lenders are going to get a credit report on you. This will contain details of any credit you've applied for (including mobile phone, gas and electricity accounts) and your payment history. A history of defaults or late payments can impact on your ability to get a loan. Everyone can get one free credit report per year. Even if you believe your history is good it's worth checking, sometimes the information held is incorrect and you can then get it changed.
#17 Consider your options - a buyer’s advocate?
Buyer’s advocates can help with the whole process of buying a home, from developing a short-list of properties to bidding at auction on your behalf and negotiating with sellers/agents. Alternatively, you can use them just to bid for you. Advocates can have great contacts and advance access to potential properties. This can be expensive but worth considering especially if your time is limited.
#18 Make the most of your flexibility.
Unlike people upgrading you don't have the complication of selling a property and trying to align settlement dates. This means you can be flexible and meet the seller’s requirements on settlement period. Make the most of this when you discuss properties with agents.
#19 Don't forgot your network.
Buying your first home can be intimidating with the need to do your research, understand the process and deal with agents and sellers. Don't forget your network of friends and family, many of whom will have gone through this process. Ask for help and advice and, if you are concerned about the auction process, perhaps getting a close friend or family member to bid for you is an option.
#20 Be diligent and avoid buying a lemon!
It's important to balance the emotion of buying that dream home with a logical approach to checking the condition of the property. Before you buy, think about a building inspection and pest inspection, identifying any issues before you buy means you can negotiate a reduction in price to enable repairs. If there are major issues you might decide not to proceed and save yourself from a costly mistake.