Buying a home is a major milestone.
But it can also be a rather lengthy and complicated process. You need to have enough saved for the down deposit, decide where you want to live, and secure a mortgage to finance the property. All of which entails extensive planning.
If you are in the market for our first home, it pays to do your research. Here we put together questions to ask yourself before making the move.
- Can I afford a mortgage?
The next question is obvious but is worth asking.
You need to really consider whether your current salary and future earnings puts you in a good position to buy a property. If you are struggling to make ends meet after paying rent, it may be worth waiting a few more years before applying for a mortgage.
This gives you time to save for a down deposit and work on your financial situation. Mapping out your finances will give you a much better idea of much you can afford. Another option is to consult with a mortgage broker to review and assess your finances.
- What are my long-term goals for the property?
Even before applying for mortgage, think about your long-term goals.
Will the property be an investment to eventually sell for a profit? Or will it be a place you settle down and raise a family with your partner? The answer will play a big role in terms of where you start your property search and the loan features you choose.
- Where do I want to live?
The next question is where to buy a property.
Location is important as where you live will have a major impact on your lifestyle. Living in the city is generally more expensive but has closer proximity to shopping and entertainment areas. Whereas living in the suburbs may be farther away from your workplace.
Both have trade-offs that you need to carefully consider before settling on a certain location. If you are intent on buying a property, make sure to visit the surrounding area.
- When should I buy?
If you are in a financial position to take on a mortgage and have decided on a location, the next step is to decide on when to buy a property. Most lenders will require putting down at least a 20% deposit on a property’s purchase price. Otherwise you will need to pay for lenders mortgage insurance (LMI). Putting down a larger deposit means borrowing less so it may be worthwhile to save for a few more years.
Another consideration is interest rates. Currently rates are at record lows so you can secure a great rate by applying for a mortgage.
Being a homeowner is extremely rewarding but it also has its challenges. It pays to do extensive research before jumping in head first. Asking these questions and being honest with yourself is the first step to being a homeowner.
If you have any questions about the home buying process, we can help.
FHOC is a leading home builder based in Perth. We work with you from start to finish to get you into your dream home. Contact us today to schedule a consultation with our team.
First Home Owners Centre Contact Information
24/7 Sales Enquiry Line: (08) 6144 1088