Good real estate tips for first home buyers
Recent information from Housing Affordability Sentiment Index (HASI) was just how positive first home buyers are about buying property right now. The data revealed the fact that 46% of the purchasers looking to buy are first home buyers, in comparison with just 28% of the market in the previous year. This clearly shows that there is confidence out there that home ownership is becoming more affordable.
When purchasing real estate you’re buying an asset that will add to your wealth over time. This is a great form of forced saving ands for many people, owning their own home provide a sense of accomplishment. Buying a property is a big decision though, so here are a few tips to make it a smoother process:
Identify your preferred suburb to live before you start looking
Deciding on the location will save you a lot of time and searching if you already know exactly where it is that you would like to live. Recent report shows that over 40% of buyers would only buy a property around 10 km of their preferred suburd.
Prepare for rate rises
Interest rates are now at historical lows and of course they will rise at some point during the term of a mortgage, so you need to factor in a worst case scenario rise of 3% when preparing for what you can afford.
Understand the Real Estate Market
Don't be led by your emotions and fall for the first home you see. Spend a few weeks researching online and attending open houses before you start throwing offers at real estate agents. Understand the values in the local real estate market will give you the advantage in negotiations.
Do you homework on you finanace
Your mortgage will be the largest investment you will make in your lifetime so shop around for the best deal. Compare interest rates, Variable interest rates are available anywhere from 4.5% to 7% – that can make a huge increasde to your repayment costs.
Know the upfront costs
If you have under 20% deposit you will be hit with lenders mortgage insurance? Stamp duty varies from state to state, Your conveyancing and legals can vary from $800 to $1500. First home buyer grants are also available, this can offset the majority of these costs.
Building and Pest inspections
Once you have found the perfect property then you get a property and pest inspection as a condition of the contract. A thorough inspection by a reputable inspector can save you a small fortune and save you from a big mistake.
Improve you approval chances
Bank are very thorough with their checks on applicants and they want to know that you are not a risk. Get your credit rating to ensure that there are no surprises. Pay down any car payments credit card balances that you currently have and the longer you have been with the same employer the better.