4 Steps to buying your first home
A lot of people have been asking me on how to start the process for buying your own home. I have put together a few points which will help you to buy your home easily and within your budget.
1. Find out your budget: Buying a home will probably be the most expensive thing you ever buy in your life. If you stick to a budget which fits your circumstances, you will enjoy living in your home or else it will become a nightmare and you might end up selling it little bit down the line. It is absolutely essential to stick to a budget while buying a home. How do you figure out your budget? That is easy, take your last two tax returns to your bank so that they can figure out your financial position. They will loan you an amount roughly 6 times your annual salary. For example, let us assume that your annual salary is $40,000. You are likely to get a loan of $240,000.
2. How much money can you contribute? The banks normally fund 70% of your home value. So, you will have to pay the deposit equal to 30% of the house value, plus stamp duty, legal fee, and other mortgage related expenses. Have you saved up for the deposit? Luckily, these days there are many grants available which will help you to make up the difference between the loan value and the house value. Please refer to my previous post on facebook to know more about the homebuilders grant, First Home loan deposit scheme and the Super First Home Super Saver Scheme. Once you have put all of these steps together, you will have the total amount you can afford. Usually, the bank that you are borrowing from or your financial planner can help you put all of these steps together easily.
3. Finding the right home: All of us have an image of an ideal home we would like to buy. Attend all the open homes which fit within your budget. Check out www.realestate.com.au and www.domain.com.au for the houses within your budget. Once you identify a few, go check them out. Make sure you are buying a house which is good value and not too expensive. As I said before, a house is going to be the most expensive purchase you ever make. Discuss the purchase with your family and friends to make sure you do not overlook any negatives the property might have.
4. Once you finalise the property and loan, get the property checked for termites and any other inspection which is necessary. You will have to hire a conveyancing lawyer to make all the other necessary checks. Then, sit back and relax - you are now the owner of your first house.