Buying a home is one of the major financial decisions we have to go through during our lifetime. Depending on your current financial state, purchasing a brand new home can make you feel excited or nervous. If you’re one of the many who feels butterflies on their stomach, each time someone opens the idea of getting a mortgage, you’re not alone. If you’re wondering what you can do to make your home buying process easier, the following tips can help.
1. Start By Knowing How Much You Can Afford
First things first, understand your buying capacity. This can be done by taking a closer look at your budget. How much can you spend every month on non-essentials? How much money can you actually save or use for loan repayment? Once you’ve determined this, you can understand how much monthly home payment you can afford.
Most lenders would recommend you allocating around 30 percent of your income to housing payment. If you’ve no other debt, you can go as high as 40. Once you know this, you’ll be in a better position to discuss the loan options you may want. If you want to know a more detailed breakdown of your home buying capacity, you can also hire a mortgage broker to help you.
2. Have a Savings Plan
Did you know that people who have savings plans find it easier to get home loans than those who don’t? Saving money is a wise move but saving before applying for a home loan is even wiser. Having a savings plan will help banks know that you’re a reliable and responsible loaner.
3. Budget and Know All Expenses
When creating a budget, make sure to include everything even the one-off expenses. While it’s true that that downpayment can be the most challenging thing to save up for, there are many small but important expenses you should also consider. Some of these include your monthly loan repayments, legal fees, builder, designer, and moving costs.
4. Select a Block of Land
This piece of advice is important for homeowners who are building their first home from the ground up. Before determining what kind of design, you also want to analyze the land where your house will be built. This is easy if you have a reliable builder who can walk you throughout the process. But if not, this is an important step you shouldn’t skip. Not all plots of land are equal, even if they may look so to an untrained eye. There are also a lot of things to consider that you might overlook and cause future problems later on.
5. Choose Your House Design
Once you’ve determined your budget and location, it’s time to choose your home’s design. This is the best part for many homeowners. Good builders can help you choose a design that fits your budget and land.
6. Apply for First Home Owner Grant
Determine if you’re eligible to receive the first homeowner grant. FHOG is a housing grant available to all Australians once they buy or build their first home. Whether you’re building a single storey, a townhouse, or a unit, as long as it’s under $750,00, you can use this grant to speed up or jumpstart your home’s building process.