Buying your first home is a dream come true for many. It is seen as a sign of financial stability, success and status. But, becoming a first home buyer can be a very daunting experience and needs a lot of research, financial planning and discipline. Here are a few tips that we believe can simplify the home buying process.
Step 1: Start Your Research Early
For a first home buyer, it is advisable to look for a home at an early stage or start researching at an early stage. Ideally, if you are looking to buy in December, start researching and scouting newspapers, websites, magazines, property listing in early May. This will give you ample time and a sense of the housing trends in specific areas.
Step 2: Determine Your Borrowing Capacity
You must consider the overall cost of the home, not simply the monthly payment, when determining how large a loan to borrow. Consider how much property taxes will cost in your chosen neighborhood, how much homeowner’s insurance will cost, how much you expect to spending on maintenance and improvements, and how much your closing costs will be. First home buyers who can’t afford a large down payment but would otherwise qualify for a home loan may be eligible for a 5% to 10% down payment mortgage. If you’ve more deposit you might enjoy a better interest rate, depending upon the lenders policy. If you’re good at managing your credit and meet certain requirements, this could be the option for you.
Step 3: Finding a Good Mortgage Broker
Mortgage Brokers are important partners when you’re buying or selling a home. Mortgage Broker can provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable especially for first home buyers. They have access to a range of loans from a lot of lenders, from the big four Australian banks to local operations, as well as small regional banks, private lenders and credit unions, which gives them a bigger scope to find the best loan suitable to you as they are well versed with the policies of all the banks. When you meet with a mortgage broker, you are effectively getting access to multiple banks and their loan options.
Step 4: Get Preapproval for Your Mortgage
If you are a first home buyer, before you start looking for a home, you will need to know how much you can spend. The best way to do that is to get preapproval for a mortgage. For preapproval, you just need to provide financial information to your mortgage broker, such as your income and the amount of savings and investments you have. Accordingly, your broker will suggest the best bank for your preapproval and will prepare your home loan application for you. Your lender will review this information and tell you how much they can lend you. This will tell you the price range of the homes you should be looking at and you be more confident regarding buying your first home buying. At this stage, you need a mortgage broker who can help you with loan comparison and has contact with trusted lenders. Nfinity Financials can assist you with this – we believe to make your home buying process easier & connect you with major lenders.
Step 5: Shop for Your Home and Make an Offer
Start to visit Open homes in your price range. Even if they are in the same area or on the same street, each house will be unique. During an open house, the seller or seller’s agent enables interested buyers to enter the property and stroll through it at their leisure or with the assistance of a realtor. Many open homes occur on weekends, particularly on Saturday, and are advertised with banners and other fanfare. To entice potential buyers, homeowners maintain their homes clean and pristine throughout this period. Cocktails or hors d’oeuvres are offered by some owners or agents at these gatherings. It might be helpful to take notes on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or videos to help you remember each home.
Make sure to check out the little details of each house. For example:
Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water
It’s also important to evaluate the neighborhood and make a note of things such as:
Are the other homes on the block well maintained?
How much traffic does the street get?
Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?
As a first home buyer, take as much time as you need to find the right home. Then work negotiating a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have agreed on a price, the house will go into escrow, which is the period it takes to complete all of the remaining steps in the home buying process.
Step 6: Get a Home Inspection
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Your mortgage broker usually will help you to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
Step 7: Work with a Mortgage Broker to Select Your Loan
Lenders have a wide range of competitively priced loan programs and a reputation for exceptional customer service. You will have many questions when you are purchasing a home, and having an experienced, responsive mortgage broker, like Nfinity Financials – can assist you can make the process much easier.
Every first home buyer has their priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. Still, others pick a loan based on the knowledge they will move again in just a few years. So, take your time while doing a loan comparison.
Step 8: Have the Home Valuation
Knowing your home’s value allows you to evaluate what you can afford, determine whether a listing is priced appropriately, and decide how to price your own home. The benefits of finding a home’s value don’t end with a purchase or sale: Refinances, home equity lines of credit, insurance premiums and annual property taxes are all based on home value.
Step 9: Coordinate the Paperwork
There is a lot of paperwork involved in buying a house. If you are a first home buyer, it is advisable to engage a solicitor to ease up your work. Solicitor will be responsible for legal aspects of the purchasing process. The process is a complex one. Lender rules apply to this process. We must closely follow these rules for the loan to proceed.
At Nfinity Financials, we take pride in going the extra mile. Our role doesn’t end with just getting your home loan. We take the time to liaise between you, the lender and your solicitor, to make sure that all goes well. From beginning to end, we work tirelessly to help you reach your goals.
Step 10: Close the Sale
At closing, you will sign all the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender.
Settlement usually take place in a digital workspace thanks to the PEXA platform. PEXA electronically delivers instructions to financial institutions involved in the transaction to execute financial settlements. So there would be no more running out of cheques.
Congratulations! You are ready to move into your new home!
There are many tips that first home buyers can follow. But we feel these are the areas where most home buyers seem to miss out. Thereby leading to a bad decision on either their home or their home mortgage. Nfinity Financials, a renowned mortgage broker in Sydney that has years of experience in assisting first home buyers with sound financial advice on their dream home.