Nothing can be more fulfilling than buying your dream home for the very first time. Whether you’re a yuppie who has acquired your first condo or a couple who has bought a townhouse to start a family, a home purchase is indeed a great investment.
Buying a home, however, is much trickier than it may seem at first. One crucial factor in your purchasing journey is to seek funding from a lender so that you can make a purchase and keep up with the mortgage in the long run. So, before you take the plunge into buying your first home, there are a few factors you may have to consider.
In this article, we will share with you four practical tips for first-time homebuyers:
1. Ensure you’re debt-free and have savings
As mentioned, a home is a great investment, which is why it will come with a heavy price tag. Not only will you have to consider the house price, but you have to factor in other expenses as well. Other than the closing cost, think of other expenses, such as homeowner’s insurance, HOA fees, taxes, maintenance cost, and upkeep cost.
This only goes to show that you have to come in prepared financially, meaning that you should be debt-free when making your first home purchase. In fact, you should have enough savings for any emergency situations, even if you seek funding from a lender through a mortgage.
2. Determine how much you can afford for your home purchase
In line with what was mentioned above, you will have to set your budget for the overall home purchase. This means that you should know exactly how much you can afford to buy because you won’t settle for something that will leave in a debt that’s spiralling out of control.
List down all the expenses involved in a home purchase – from downpayment up to the closing cost. Never miss out on the miscellaneous expenses that will come along the way as well. Even if you take the mortgage route, make sure that you know your payment terms and conditions.
3. Check out various potential homes
While you’re setting a budget, it’s best to check out multiple homes so that you have many options for your choosing. Factor in what you want, whether it’s a condo, a townhouse, or a multi-housing unit. Consider the location, the neighbourhood, the amenities, and all the perks involved.
You will also need to consider the accessibility to modes of transport, schools, parks, and business establishments. With all these in mind, you will be able to narrow your options and select the best home for you.
4. Obtain pre-approved mortgage rates and compare them
After knowing your budget and establishing the value of the home that you can afford, be sure to look for the best mortgage for your purchasing needs. According to the Consumer Financial Protection Bureau, comparing mortgage rates from at least three lenders can help you save up over the first five years of your loan.
For this reason, obtain at least three quotes from prospective lenders and compare their rates and fees. From there, you’ll be able to find the best mortgage plan for your first home purchase.
At this point, you are now prepared to make your first home purchase. As mentioned, make sure you have enough savings, set your budget, check out potential homes, and seek the right mortgage for your first home purchase. If you need professional help with finding the best lender for your mortgage, it’s best to work with a finance broker that can help direct you.
We are one of the leading finance brokers in Australia, and we have access to over 25 lenders with various loan options. If you need help with finding the best home loan as a first-time homebuyer, get in touch with us today to see how we can help!