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7 Sep, 2023
Organise Your Finance & Budget
Mortgage Broker Comments Off on Navigating the Property Market – A First-Time Homebuyer’s Guide

As a First-time homebuyer the prospect of buying or selling a home may seem like a monumental task. So many factors to consider and a myriad of available options can be daunting. Having insight and a solid grasp of the process will provide you with the confidence to navigate this path and find your ideal home. We at Brisbane Home Loans invite you to take a read through this general guide and get in touch with us. We are ready to walk you through this journey to reach your goals of purchasing your ideal home.

Getting Started in the Australian Property Market

The Australian property market can be overwhelming, especially for first-time home buyers. With ever-changing regulations and fluctuating prices, it can be challenging to know where to start. Your team at Brisbane Home Loans is passionate about assisting first home buyers prepare and source their first home loan while avoiding the pitfalls and being able to make a fully informed decision.

Budgeting and Saving

Saving up can be difficult, but if you’re going to acquire your first home, then you need to stick at it. It looks good to banks if you’ve been saving up a decent proportion of your income over an extended period. Usually, lenders will require evidence of your savings from the past three to six months.
A comprehensive budget is invaluable if you are going to reach your goals. Write it down! There are heaps of useful resources online where you can enter in the data to get an overview of where your money is going and how much you can realistically save. Try out Money Smart’s Budget Planner here:
https://moneysmart.gov.au/budgeting/budget-planner

Consider Extra Costs

Having a financial cushion is imperative as it provides a safety net for unexpected expenses. These unforeseen costs may include stamp duty, building and pest inspection, conveyancing, among others. To calculate your expenses more accurately, please ask our Specialist Brokers to provide you with a funding worksheet once you have chosen a property. We can also provide you with estimates based on your intended budget for a home.

Understanding the Property Market

Have a look around and think about your ideal neighbourhood or city plays a significant role in your decision-making process. Researching crime rates, public transportation accessibility, local schools, and other amenities can greatly influence your final choice.”
It’s a good idea to narrow your search down to property type and preferably no more than one or two suburbs. This will provide you with an opportunity to study the market in those areas by using online websites to search properties for sale, recent sales and suburb reports. Becoming an expert in your chosen area will ensure when it is time to make offers, you are aware of which properties are within your budget.
As a service to all our Home Loan clients, Brisbane Home Loans will provide you free of charge, property reports from CoreLogic to assist you to quickly become a suburb expert in your chosen area. Knowing current prices and recent sales can be a great tool when you are ready to make offers on property.

Setting Your Budget

If you’re a first-home buyer, your budget will be based on your borrowing capacity. Before starting your home search, it’s pivotal to understand your financial situation. This means evaluating your current income and expenses, debts, and credit score. It’s important to be realistic about what you can afford and what type of loan you qualify for. Lenders will consider your income, assets, and credit history when deciding whether to approve your mortgage application. It’s also important to have a clear understanding of the additional costs that come with purchasing a property, such as legal fees, stamp duty, and property inspections. Budgeting for these costs upfront can help you avoid any surprises down the line.

Understanding Your Borrowing Capacity

So, you’ve delved into the property market, and now it’s time to work out your budget. This step not only determines how much you can comfortably afford but also helps you narrow down your property search to match your financial needs. Remember, it’s not just about the property price; you should also factor in other costs like utilities and maintenance. Don’t let unexpected expenses catch you off guard! Plan ahead to ensure your budget isn’t stretched too thin. While it might be tempting to base your budget on the available properties in your dream neighbourhood, start by considering your deposit and how much you can borrow.

Seeking Professional Advice

It’s wise to speak to your Brisbane Home Loans mortgage broker at the very beginning of your home-buying journey. Even if you don’t have a big deposit saved, they will be able to advise on how much you will need for a deposit for the kind of properties you are interested in, which gives you a goal to aim towards. Your Specialist Brisbane Home Loans Mortgage Broker will provide you with all the information you need to assist you to get credit ready and they will calculate a maximum loan amount based on your income, savings, assets, expenses, and credit history. This doesn’t necessarily mean you should borrow up to your limit. Borrowing capacity can also change as interest rates go up or down and lending policies are sometimes adjusted. It is a good idea to stay in regular contact with your Brisbane Home Loans Broker so they can re-evaluate quickly, should you find a property you are interested in.

Consider Your Financial Stability

It’s wise to conduct a financial resilience check before setting your financial limits. Can you weather a 2 percent rise in interest rates? Do you have a financial buffer substantial enough to cover several months’ worth of mortgage payments in case you face unexpected job loss or financial challenges? Regardless of your current job security, it’s crucial to anticipate unforeseen future events. Ensuring your financial preparedness for worst-case scenarios provides you with a safety net when it’s needed most

Government Grants and Incentives

Eligible first-home buyers can take advantage of various government grants, discounts, and schemes. These incentives are designed to help make it easier to buy a first home. Most incentives require buyers to live in the property for at least 12 months, and buyers whose partner has previously purchased a home are normally excluded. There are also maximum price thresholds, and schemes can change from time to time.
https://www.nhfic.gov.au/support-buy-home/first-home-guarantee
https://qro.qld.gov.au/property-concessions-grants/first-home-grant/
https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/transfer-duty-concessions-exemptions

Due Diligence

Once your offer is accepted, it’s essential to conduct due diligence to ensure you’re making a sound investment. Hire a professional home inspector to thoroughly examine the property for any structural, electrical, or plumbing issues. Review important documents like the seller’s disclosure, title report, and any homeowner association rules or restrictions. If any issues arise during this process, negotiate with the seller for repairs or credits.

Getting Lending Pre-Approval

Talk to the experts. Sure, you can speak to individual Banks or Lenders or you can come to us at Brisbane Home Loans and we can look across an entire panel of lenders with hundreds of products. An individual lender can only offer you the best that they have, we can search the entire market and provide you with a detailed break-down of the differences in both features and costs over three years and also over the life of the loan.
By following these comprehensive steps and seeking expert advice, you’ll be well-prepared to navigate the Australian property market confidently and make the right decisions when buying your first home.

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