Preparing for your first home

In a financial climate where can be difficult to secure your first home, there are some things that you can do well before you sign on the dotted line to improve your chances of getting the home of your dreams. Aside from the first home owners grant handed out by the government, there are some other important financial steps you can take to maximise your borrowing power.

Savings 

 It’s well known that the more savings you have and are willing to pour into the loan, the less your repayments will be in the long run. Start saving for your deposit as early as possible to maximise the benefits. It sounds hard, but a disciplined savings plan over a long period of time will reap massive rewards when it comes to applying for the loan. 

Commitments

- Keep on-going commitments to a minimum

- If you’re planning to purchase property in the not too distant future, don’t take on any additional credits cards, personal loans or car loans etc.

- These will decrease your borrowing power and increase your overall monthly repayments

Spending

- Keep overall spending to a minimum – ask yourself before you buy, is it a NEED or a WANT?

- It may be hard, but that new TV or outdoor setting can probably wait until you are settled into your new place and your finances are in order.

Bills and deadlines

- Make sure all bills and payments are made on time

- If any deadlines are missed for payments, this could affect you credit score and make you more of a risk for lenders

Jobs

- If possible, try to remain in the same job for a sustained period of time.

- It is a requirement of many lenders that an applicant has been in that job for at least 3 months, and with some lenders even up to 12 months

- Stable employment is looked upon as a positive that the applicant can continue to fund the repayments over time 

Set a Budget

- Take the time to sit down and list your income and expenses. This will provide you with a real snapshot of how much you can afford as a loan repayment, or the amount you can set aside for a savings plan for a deposit.

- If you can only afford a $500,000 property, don’t get your hearts set on a property worth $530,00 because you simply won’t be able to afford it

- If your overall budget is $500,000, STICK TO IT!

One of the most beneficial things to do if you’re looking at purchasing your first home is to speak to a broker. Steve Sims will take all of the hard work out of the loan procedure and will give you all the information you need to know about the home buying process For expert home loan advice, call Steve today on 0433 124 081 or email at steve.sims@mortgagechoice.com.au 


Posted in: First home buyers

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