With an ever increasingly tight home loan market, first home buyers are finding it harder to get out of the rental trap, but all is not lost, you just need to get smarter.
With the price of the average home soaring, lenders tightening their borrowing criteria and spiralling rentals cutting into post tax dollars most would-be first home buyers feel like the odds are stacked against them when it comes to purchasing a home.
But despite some obstacles, buying your first home is still possible, all it takes is a little time, mortgage know-how and the commitment to managing your finances.
First up, get to grips with your monthly incomings and outgoings – if you can develop and stick to a budget you’ll be best placed for factoring a home loan into your life. Consider if, and where you need to cut back to cater for mortgage repayments, and consider what impact this may have on your lifestyle.
Aside from a deposit, home buyers are faced with a string of costs including legal, government fees and moving bills – just to name a few. Start a dedicated savings fund early so when it comes to application time you will be able to demonstrate that you have sufficient finances to settle.
Knowledge is power, so the more you know the type of loan you need, the better equipped you’ll be to find the product for your situation. Consider how quickly you want to repay your mortgage, and whether you’d like to fix your interest rate or would like some flexibility. While information is easily available on the internet, your mortgage broker is best positioned to answer any questions you may have.
First home buyers need a pre-approval
Having a pre-approved home loan enables you to realistically look for a property in your price range. It also gives you power to bid for a house or put in an offer as soon as you see it – rather than risk missing out on it should you delay.
Get a good team
Having a mortgage broker on hand is essential for finding the most appropriate mortgage for you. Your broker has access to most of the leading loans and can easily track down the products that suit your circumstances – especially if affordability is an issue.
It’s also important to seek sound legal advise, an understanding of the government grants and incentives that are available for first home buyers as well as a feel for where interest rates are heading. With the aid of a mortgage broker backed by other relevant professionals you’ll be much better placed to make your first home buying experience a positive one.