Buying your first home on the Northern Beaches can be one of the most exciting and nerve wracking times in your life. Being well informed about what to consider can save you from unnecessary stress and wasted money in the long term. Here is a checklist that we have created to guide you in getting ready to purchase your first home.
Step 1: Do your research!!
- Researching the property market trends is essential and the first step in preparing yourself for buying a property on the Northern Beaches. This can take time and can be challenging to get your head around at first. Take it step by step and start reading the financial review and become familiar with the current property market as well as historical trends in Australia. You might even consider downloading the bloomberg app onto your tablet or phone to keep you up to date with the latest economic trends which will greatly impact the current marketplace. Take your time with this and don’t be afraid to watch and wait.
- Create a list of the things that are important to you in a property. Start by dreaming big and just writing down everything that you would love to have in your first home. This list should include things like location, parking, bedrooms, access to schools and shops and transport. Once you have a list of what is important to you in a property, break this down into two different lists – “must haves” and “would likes”. Perhaps on your “must-haves” would be parking, and on your “would-likes” would be wooden floorboards.
- Spend time talking to real estate agents and attending as many property inspections as you can stomach! Investigate recent sold prices both in your preferred suburbs, as well as surrounding suburbs. You might find that travelling an extra 15 minutes could save you a fortune. You should also consider “living like a local” in your chosen suburbs. Eat at local cafes, spend time at the local park – it can take time to get a true sense of a place and you want to be sure that you are buying in the right place for you, especially if you will be living in the property for years to come.
- Attend auctions and become comfortable with (or at least practice) negotiating. Throughout the process of buying a property, it is likely that there are going to be several instances where you will be required to negotiate.
Step 2: It’s time to budget!
Whether you are a single or couple, knowing your budget is a crucial part in preparing to buy your new home. Here are some tips to assist you in getting your head around your spending and getting prepared for a mortgage.
- Keep a financial diary of your spendings over a long period of time. Write down all of your earnings and every single thing that you spend any money on. Either keep a small diary specifically dedicated to this with you at all times, or create a spreadsheet on your tablet or computer. There are also some great apps which can assist you in tracking your spending. Tracking your spending can be a bit of a shock if you have never kept a financial diary before, but oh so important.
- It is likely that with a mortgage you could be paying quite a bit more than you are currently paying with rent, so consider areas that you could save. If you need assistance with this, it might be a good idea to speak to a financial advisor who can review your current spendings, savings and debts and work with you to create better spending habits and set some saving goals.
- Remember that calculating your mortgage repayments and what is going to be realistically affordable for you in the long term is going to be much easier if you have a good idea about your spending trends.
- It can be helpful to make some long term savings goals which can help with motivating you to skip spending that extra $18 on smashed avo toast this weekend. Don’t forget but unless you are making millions (unlikely if you are reading this blog) you are going to have to make some sacrifices if you want to purchase your dream home.
- Don’t forget to consider all of the additional costs that you will be up for. Buying your first home is not just about getting a deposit and a mortgage together. You will also need to consider having further savings for stamp duty, legal and conveyancing fees, building inspections, insurances, interest rates and moving costs. This can add up quickly so having an in depth understanding of your budget can make these costs less daunting.
Step 3: Speak to a mortgage broker
Finding out how much you can borrow is the next important step. While an online calculator can be a great start, make sure that you speak to a mortgage broker to discuss all of the ins and outs of getting a mortgage.
- Consider whether you are eligible for the first home owners grant. The amount that you are eligible for will vary from state to state across Australia and these grants do tend to change each year. You can discuss this with your mortgage broker.
- Don’t be afraid to shop around to find the right home loan for you – choosing the wrong one could cost you thousands in higher interest fees.
Remember, buying your first home is not going to happen overnight, or even by the weekend. Being fully prepared is going to take time. The most important thing is being prepared and knowing the property market.
Photo cred: Dane Deaner