The 4 things you should do before buying your first home
I work with a lot of first time home buyers. It’s a really exciting and stressful time in our young adult lives. I remember being slightly freaked out about the contract signing portion of the process. Sitting in a room, signing a 20 page document about how I want to buy something worth sooooo much money. Up until that point, the biggest purchase I had ever made was my Toyota Corolla!
It’s nice to be able to help my clients with this kind of thing and often it is the catalyst for them to come and see me. Buying a house is one thing but what else should you be doing to prepare for this?
There are always 4 things that I am going to recommend that first home buyers do before they jump on in:
Get your personal insurances sorted – This is Life, TPD, Trauma and Income Protection. You want to know that if something happens, you can keep your house and service the loan. Most loan providers will actually want to see what insurance you have in place anyway, so getting this before you take out the loan is beneficial.
See a mortgage broker – No seriously, SEE A MORTGAGE BROKER. They will tell you what you can and can’t do, get you a better deal and do all the work for you. Before you go putting offers on a house, you need know what you can and can’t actually get from a bank.
Revise your personal budget – It’s one thing to have a bank tell you how much they are willing to lend you, it’s another to actually work out if you can afford the repayments with all the rest of your expenses. I really don’t like those current affairs type shows that feel sorry for the people taking out bigger loans than they can afford. Yes, banks will probably lend you a high amount, but it is your responsibility to see if you can comfortably afford the repayments. Just because the bank is willing to lend you $1mil, doesn’t mean you should take it.
Make a list of non-negotiables – We all want a pool, walk in robe, ducted aircon and enough room to house a small village but we rarely get that when buying our first home. Have your list of things you absolutely must have. Sometimes when you are visiting open homes, you can get caught up in the excitement, so having a list of ‘must haves’ jotted down will make sure you stay on track. Whilst you may not get that plunge pool, having a bath might be really important to you. Once you know what you need, you won’t waste your time on places that don’t tick the boxes.
This process is likely something we will all face at some stage. Make sure you talk to the right people, take your time and don’t ever feel like you are pressured to do anything. If you are feeling that way, then step away, take a breather. It’s a big commitment and something that you should feel comfortable with. If you do the above 4 things to get yourself ready, you’ll have a bit more confidence about you to find that perfect home.
The post is from our resident Financial Planner Cara Brett, check out her details in the About Us section.