5 tips for first home buyers

Buying your first home is nerve wracking AND exciting;  but what do you need to know before you put down your hard earned cash as a deposit on your first home? We also highlight a few things you should know BEFORE you make an offer on a property.

How hard could it be?

Buying your first home is not like an instructional video on Instagram; you can't fastfoward past the tricky parts and admire the end result. It can be drawn out, complicated and will almost certainly be emotional. There are a few points you need to read through to get your head around the idea of buying your first home.

1. The sale or list price of a property is not ALL you pay when decide to buy 

Aside from the purchase price of the property, you'll need to pay solicitor’s costs and building & pest inspection costs. If you're ineligible for one of the State Government’s home buyer grants, you'll need to pay stamp duty on your property as well (read more about stamp duty here). Remember that moving house isn't free either; truck rental, mail redirection, utility, phone and internet connections all cost you. Establishing photo worthy gardens, fences and driveways are extra costs to consider if you're building. You may also need to pay lender's mortgage insurance depending on how much you've saved as a deposit.

2. Look beyond the house and watch the neighbourhood before committing to buy

To clarify, we're not suggesting a stake out or hard surveillance. However introducing yourself to potential neighbours BEFORE putting in an offer will give you a great opportunity to ask questions about the area and get a feel for the people you could be living alongside in the future.

3. Keep calm and pay extra into you home loan 

When you're first setting yourself up in your own place, it's an expensive time; BUT if you can pay a little extra into your home loan you could thousands off your home loan, over it's term. At The Mac, any extra money you pay off your home loan is available anytime through your free redraw facility. Trust us, having a little emergency stash in your redraw is good to cover emergencies AND it also lowers the amount of interest you pay on your loan.

4. Look beyond the lowest interest rate when trying to find the ‘right’ home loan for YOU

Just like looks aren't everything in a relationship, the lowest rate isn't always the key to a long and happy home loan. Costs and fees are hidden in lots of home loan products so make sure you read the print and pay attention to the comparison rate on any home loans you are considering. Keep in mind if the bank or financial institution will charge you extra for paying more into your loan or for accessing your redraw. One final point on this, your home loan term could be up to 30 years long, so you need to be happy with how you're treated as a customer or member. Simple courtesy and friendliness go a long way.

5. Do you REALLY need all those expensive extras or features on that house?

It's so easy (and tempting) to spend extra on a beautiful 5 bedroom house, complete with sun room and three bathrooms, but is the possibility of overcommitting yourself financially worth the status? Your bank or financial institution can change interest rates at any time. If you borrow your maximum and you're already stretched thin financially, you could really get yourself into trouble. Be smart when borrowing; search out ethical and honest lenders like The Mac. When things get tough, you'll want the reassurance of someone who genuinely cares about your financial situation. 

Essential points:

  1. Be prepared to spend more than the purchase price of the property
  2. Pay attention to the neighbourhood before you commit to buy; you don't want too many hidden surprises
  3. Pay extra into your home loan and save yourself thousands
  4. A good home loan product is more than just it's interest rate
  5. No overcommitting yourself financially; interest rates will fluctuate over time

Want to know more?

So much to say, so little time. Read through our Advice Centre for more interesting and important information on property purchases or if you'd like to speak to a lending specialist from our team, call 1300 622 278 Monday to Friday 8am - 5:30pm. You can even request a call back from our team.

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