The Comprehensive Guide to Becoming a First Home Buyer
Are you looking to purchase your first home? PRD can help you every step of the way, from finding the right property and securing finance through to settlement. We know that buying a first home is a big decision, so we’ve put together this comprehensive guide to becoming a first home buyer.
What we’ll be covering:
- Deciding to Buy
- Grants and Incentives
- Finding the Right Home
- Buying Process
- Settlement and Next Steps
Deciding to Buy
The first step is deciding that you’re ready to buy a property. There are several factors to consider when determining whether you can afford to buy, what are your must-haves, nice-to-haves, and compromises you’re willing to make. It’s also important to understand what you can afford and how much of a deposit you’ll need to save. In most cases, you’ll need a deposit of at least 5%, but if you have a 20% deposit, you may be able to avoid paying the lender’s mortgage insurance (LMI).
Determine why you’re buying. It’s also essential to determine why you’re buying a property. For example, are you looking to rent it out, rentvest, or purchase an off-the-plan property to live in or owner occupy? Each of these options has different considerations, so it’s important to understand the pros and cons of each before making a decision.
Considering the above, it is best to avoid borrowing too much. Banks perform stress tests to ensure you can service a loan despite interest rate rises, giving you a greater idea of your borrowing capacity in this environment. With this in mind, avoiding biting off more than you can chew is still best. Seeking help from a mortgage broker can enable you to establish options whilst approaching your first property endeavour with a clear and driven mind at the helm. PRD has an experienced network of professionals for all legal and financial services required in the property purchasing process.
Grants & Incentives
The Federal and State Governments offer a range of grants and incentives for first-home buyers. These can vary from state to state, so it’s essential to do your research and understand what’s available in your situation. For a guide to the NSW grants available, see PRD’s Grants and Schemes for the Savvy First Home Buyer.
Once you’ve decided to buy a property, it’s time to start thinking about financing. In most cases, you’ll need to take out a home loan to finance your purchase. The first step is getting pre-approval from a lender, which will give you an idea of how much you can borrow and what your repayments will be. Next, it’s important to compare different lenders and loan products to find the right one for you. Mortgage brokers have access to various lenders and can help you compare home loans and find the right one for your needs. In addition, PRD can establish a relationship with several financial professionals, saving you the headache. So get in contact with our team at PRD Wagga.
You must understand the hidden fees that come with purchasing a property, including;
– Conveyancing & legal fees
– Stamp duty
– Building & pest inspections
– Mortgage registration fee
– Transfer fees
– Mortgage Insurance
– Insurance costs
– Moving costs
Finding the Right Home
Now that you’re armed with a pre-approval and know how much you can afford to spend, it’s time to start looking for your first home. It’s important to have a clear idea of what you want but also be open to compromise. Location is usually the most significant factor in determining price, so deciding what location you want to live in and what type of property will suit your lifestyle is important. Due diligence is critical when purchasing any property. It’s imperative that you do your research on an area, as well as the individual property itself, before making an offer. PRD can help you find the right property for your needs. Get in touch with our team, and we will assist in this monumental time.
Once you’ve found the right property, it’s time to make an offer. In most cases, you’ll need to engage a conveyancer or solicitor to help with the legal aspects of the transaction. The next step is to negotiate the purchase price with the vendor.
Most Australian states have a cooling-off period for property purchases, which gives you time to change your mind after signing the contract. For example, in NSW, the cooling-off period is five business days. So after exchanging contracts, you have until 5 pm on the fifth business day to rescind the contract and get your deposit back. PRD deals with conveyancers and legal professionals who can help you purchase your dream home. So give us a call and Buy Smarter with PRD.
Settlement & Next Steps
Settlement is the final stage of the purchasing process and usually takes place 4-6 weeks after exchange. You’ll need to pay the purchase price balance and any other fees and charges at settlement. Once settlement has been conducted, the keys will be handed over, and you’ll officially become the property’s new owner.
After settlement, there are a few key things to do:
– Arrange building and contents insurance (Think about doing this before receiving the keys)
– Notify your utility providers (gas, electricity, water) of your change of address or activate their services at your new address.
– Forward your mail to your new address
– Update your contact details with PRD so we can keep you updated on market trends in your area.
Congratulations, you’re now a homeowner! PRD can help you every step of the way, from finding the right property to negotiating the best price. Contact us today to get started on your journey to homeownership.