Buying a home is an exciting milestone, but, it can also be a complex and overwhelming process, especially for first-time homebuyers. To help you navigate this journey with confidence, we’ve gathered our team’s expert advice and turned them into these top tips.
Before you start house hunting, establish a budget that aligns with your financial situation. Consider your income, expenses, stamp duty and potential monthly mortgage payments. By setting a realistic budget, you can ensure comfortable financial management. Plus, by allocating your money towards your first home versus renting, you are receiving long-term stability and potential equity growth in return.
Saving for a deposit is an essential step in securing favourable mortgage terms. Aim to save at least 10% of the home’s purchase price, as this will give you access to a broader range of mortgage options and better interest rates.
Your credit score plays a significant role in obtaining mortgage approval and determining the interest rate you’ll receive. Take the time to review your credit report and address any errors or issues. By paying bills on time, avoiding new debt, and maintaining low credit card balances, you can improve your credit score, making you more attractive to lenders.
Prior to embarking on your home search, it’s highly recommended to get pre-approved for a mortgage. This involves providing your financial documents to a lender who assesses your credit and provides a pre-approval letter stating the loan amount you qualify for. A home seller often asks for a mortgage pre-approval letter before negotiating with a buyer, so by planning for this from now is a positive move in the right direction.
Pre-approval requires proof of employment, assets, income tax returns, and a qualifying credit score. Mortgage pre-approval letters are typically valid for 60 to 90 days. Upon pre-approval, the lender provides the maximum loan amount, which helps set a price range for you. Pre-approval also demonstrates to sellers that you’re a serious buyer, giving you a competitive edge over others.
When selecting an area, consider your lifestyle, commute, amenities, schools, and future plans. This includes thinking about what makes you happy in your free time. Would you like bicycle trails and walking paths accessible from your doorstep or is it more important to have shops nearby? Are you looking for a village feel or do you prefer city living? How is traffic? Also, research crime rates, property values, and growth potential in the area you’re interested in. Take the time to visit the area at different times of the day to gain a comprehensive understanding of the environment and ensure it suits your needs too.
Partnering with us, your knowledgeable and reputable estate agent greatly simplifies the process. We specialise in local knowledge (sharing where the best local is to grab a bite to eat or what best schools are nearby), help you find your ideal home, negotiate on your behalf, and ensure a smooth transaction. Our experts and network can be invaluable, particularly for first-time buyers.
Make a list of your essential home features and categorise them in must-haves and maybes (ones that you can compromise on). Focus on factors, such as the number of bedrooms, bathrooms, square footage, and location. It’s important to be flexible and willing to compromise on less crucial wants to stay within your budget and find a home that meets your needs.
If you are a first-time home buyer, reach out to us anytime. We are happy to answer your questions, help you plan, and find you your first home.
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