Buying a house is never an easy time in our lives; there are almost always unexpected stresses and complications and it seems that you’re never going to get there. But allowing the objective pessimism of the perceived situation beat you down, or worse being too afraid to try in the first place, will rob you of the joy of owning your own home from you.
If you are a first time buyer, then all of these issues will be feeling ten times as prominent, but if you persist, things usually work themselves out. For first time buyers, even getting into the position where you are ready to buy is usually a massive uphill struggle, but by learning more about your finances and how the mortgage market works, you can give yourself the best possible chance of taking that first leap onto the property ladder.
Budget is everything
The more you look into it, the more you will probably become very aware of how budget effects the first time buyer. Getting your first mortgage is going to mean you need some money behind you, and that means you’re going to need to be saving as much as you can. Deposits vary between lenders and products, but they tend to start at 5% of the total value of the property, so if you bought a $100,000 property you would need $5,000 just for your deposit. Depending on where you look, the average house price across Australia is between $500,000 and $800,000, which means that first time buyers are looking at a considerable amount of saving.
Budget doesn’t just mean saving though, it means monitoring and regulating what you spend as well. Give your finances a health check by looking through your accounts and seeing what you pay for by direct debit. These little bloodsuckers can make a huge difference to your bank balance as it is all too easy to set them up and then forget about them. Many people are still paying for insurance for phones they no longer own or subscriptions to things they never use, so go through and cancel any that are useless to you. It is also worth getting a credit report from one of the free online providers and this will come with advice to help you improve it as well. The better your credit score, the better your chances at a successful application will be.
Go mortgage window shopping
Browsing around the mortgage market will help you start to understand the type of products out there and how the various lenders tend to phrase things and operate. As with most things, the more exposure you have to the mortgage market, the more you will become familiar with it and be able to make more sense of the various jargon and terminology when you come to apply for a product. There is also no harm in seeking the advice of a mortgage broker as they will often be able to tell you what the best home loans for you are going to be. Just ensure you ask about fees before-hand as many will take their fees from commission, but not all operate like this, so don’t get stung with another expenditure you don’t need.
