The First Home Buyer’s Journey – From Dream to Reality
Buying your first home is a significant step, both financially and emotionally. It can be an exciting yet overwhelming and stressful experience. Surrounding yourself with a trustworthy team is essential for a seamless journey. Our team at Brisbane Home Loans is here to answer your questions, provide information, and ensure you understand the process, empowering you with confidence.
In this comprehensive guide, we’ll walk you through the essential steps and considerations involved in buying your first home. From establishing your budget to navigating the mortgage process and finding the perfect property, we’ll equip you with the knowledge and confidence to make informed decisions throughout this rewarding adventure.
START EARLY
Embarking on your first home-buying journey? Engaging an experienced mortgage broker is a crucial initial step. At Brisbane Home Loans, we’re passionate about working with first-time buyers right from the start, even if you’re 12 months away from being ready to purchase. Understanding the process, assessing your credit score, discussing your budget, and borrowing capacity will set you on the right path. Don’t delay; the information we provide will expedite your progress. Book an appointment with us here.
REDUCE SPENDING & START SAVING
It’s an ideal time to evaluate your finances. If you don’t already have a budget, we highly recommend creating one. Regularly reviewing your expenses by examining your bank statements will help you make adjustments before minor issues become major problems. Look for any unauthorized account activity.
Rent payments can significantly impact your income. Consider moving back home, finding a housemate, or any other way to reduce rent expenses and bolster your savings.
Consider taking on a side hustle or hosting a garage sale to increase your income temporarily or permanently and, consequently, your savings. We assist many clients in getting credit-ready, sometimes over several months. Please call our office on (07) 3889 9250 if you’d like our assistance to accelerate your progress.
UPWARD SPIRAL
You often hear about downward spirals, but in our experience, an upward spiral is equally possible. One of our clients recently received their annual bonus, tax returns, and sold unused garage items for extra cash. They used this money to pay off one credit card entirely and half of another. By directing any extra funds toward the second card, they managed to close both within a few months. Small windfalls, whether expected or unexpected, can make a substantial difference.
PAY DOWN DEBT
If you have personal debts, such as credit cards, personal loans, or car loans, consider paying off the smallest one first and closing them as you go. Reducing personal or consumer debt will boost your deposit and increase your borrowing capacity.
HOW MUCH DEPOSIT DO I NEED
A larger deposit results in a lower loan-to-value ratio, potentially leading to lower interest rates and an easier time securing a home loan. It can also help you avoid paying Lenders Mortgage Insurance. If you don’t have a 20% deposit, don’t worry; many lenders accept applicants with a 5% deposit plus costs. If you qualify for the First Home Guarantee, you can even skip paying LMI, saving you thousands of dollars. In a fast-moving market, consider the extra time required to save versus the rising prices.
FIRST HOME BUYER ASSISTANCE
Depending on your location in Australia, various government schemes can assist first-time homebuyers. In Queensland, the First Homeowners Grant is available for new homes or substantially renovated properties. The Queensland Government also offers stamp duty concessions for eligible first home buyers. The Australian Government provides additional schemes to help individuals into their first home. For more information, visit these links:
PRE-APPROVAL
As you get closer to being ready, we’ll update your borrowing capacity and guide you through your options. When you’re prepared, we’ll seek pre-approval from your chosen lender, giving you strong negotiation power for your house hunt.
Our team member, Karen, will assist you with individual property and suburb reports, making you a suburb expert. When you provide us with your list of open houses, Karen will send you reports and sold prices, ensuring you can make informed offers once you find your desired property.
AFTER YOU ARE PRE-APPROVED
Remember that your pre-approval is for a specific amount. Purchasing a home for less than that amount is no problem, but if you decide to spend more, we’ll need to reapply for a higher amount. Please talk to your Specialist Broker to ensure you have sufficient borrowing capacity.
Interest rate increases after pre-approval can affect your borrowing capacity, so keep your Broker updated to make necessary adjustments. Additionally, changes in your circumstances, such as employment changes or taking on credit cards or loans, can affect your pre-approval amount. Please inform your Broker of any such changes.
FORMAL APPROVAL
Converting your pre-approval is a straightforward process. Once you find a home, negotiate a price, and sign a contract, we’ll arrange a valuation and send it to your lender for formal approval. In Queensland, remember to take out building insurance within one business day after signing the contract. After formal approval, you’ll receive loan documents, and settlement will be scheduled by your Conveyancer.
SETTLEMENT
Your conveyancer will coordinate with the lender and the seller for settlement as per your contract, and your home will be yours. Congratulations!
Your personal Brisbane Home Loans Specialist will maintain contact with you at least annually to conduct a home loan review, ensuring your home loan still suits your needs. We’ll check your rate, negotiate with your lender, and help you switch to a better product if necessary.
Don’t put it off, get in touch today and book a chat with your local Home Loan Specialist.
