When buying their first home in Australia, there are several important things that first home buyers should be aware of. Here are some key considerations:
Eligibility for First Home Owner Grant (FHOG): The FHOG is a government incentive program that provides a one-time grant to eligible first home buyers. The eligibility criteria, grant amount, and application process may vary between states and territories. It's crucial to understand the specific requirements in your location.
Saving for a Deposit: Saving for a deposit is a significant aspect of purchasing a home. Most lenders require a minimum deposit of 5-20% of the property's value. It's important to plan and save accordingly to meet the deposit requirements and consider additional costs like stamp duty and legal fees.
Home Loan Pre-approval: Before starting your property search, consider obtaining a home loan pre-approval from a lender. This process assesses your borrowing capacity and provides an estimate of the loan amount you may qualify for. Pre-approval helps you understand your budget and increases your confidence as a buyer.
Property Research: Conduct thorough research on the property market, including the location, property prices, and recent sales in the area. Consider factors such as proximity to amenities, transportation, schools, and potential for future growth. Engage with real estate agents, attend inspections, and gather as much information as possible to make an informed decision.
Professional Help: Engaging professionals like a solicitor or conveyancer is essential for navigating the legal and contractual aspects of buying a property. They will help with tasks like reviewing contracts, conducting property inspections, and ensuring all legal requirements are met throughout the purchasing process.
Loan Comparison and Structure: Explore different home loan options and compare interest rates, fees, and repayment terms from various lenders. Seek professional advice to determine the most suitable loan structure, whether it's a fixed-rate or variable-rate loan, and consider features such as offset accounts or redraw facilities.
Government Schemes and Incentives: In addition to the FHOG, there may be other government schemes or incentives available to first home buyers, such as stamp duty concessions or exemptions. Research and understand the eligibility criteria and benefits associated with these programs to maximize your savings. Again a Mortgage Specialist will help navigate these areas for you.
Building and Pest Inspections: Before finalizing the purchase, it's advisable to arrange building and pest inspections to identify any potential structural issues or pest problems. These inspections can uncover hidden costs or risks associated with the property and help you make an informed decision. If you’re buying an apartment then it’s essential you get a strata report as this should highlight any potential issues or future costs that the apartment block needs to undertake.
Budget for Additional Costs: Beyond the purchase price, there are additional costs to consider, including stamp duty, legal fees, loan application fees, property valuation fees, and potentially lender's mortgage insurance (if applicable). Factoring in these costs in your budget is crucial to avoid financial surprises.
Future Financial Planning: Buying a home is a long-term commitment. Consider your future financial goals, assess your capacity to manage mortgage repayments, and plan for unexpected expenses or changes in circumstances.
Remember, it's essential to seek advice from professionals such as mortgage brokers to ensure you make informed decisions throughout the home-buying process.