Buying your first home can be both exciting and overwhelming. After all, it’s your first step onto the property ladder and quite possibly your first major investment.
It’s also an expensive and time-consuming process. So even though this is your first house, you should try to ensure that you’ll be happy in it for as long as possible. We have created this guide to help you do exactly that.
Work out what you want and where
One of the earliest and most important things to do is to take the time to consider your wants and needs – not just today, but how you anticipate them changing in the foreseeable future.
A critical aspect to this is identifying the ideal location for your first home, in terms of proximity to your work, family and social networks, lifestyle activities and environmental appeal.
Do your research with real estate agents and online sites to work out if you can afford to buy a house in the areas you want to live. If not, you might want to consider buying an investment property in a cheaper area and renting where you work and play. That way you’ll still be building equity in your own property, but without sacrificing the things you care about.
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There are many costs involved in buying a home, so it’s important to factor them all into your budget when working out how much you need to borrow.
One of the biggest costs for first home buyers is often Lenders’ Mortgage Insurance (LMI). LMI is insurance paid for by the homebuyer, which protects the lender against the risk of the buyer not paying back their loan. It’s usually required if you borrow more than 80% of the value of the property, so the bigger the deposit you can save, the less you’ll need to pay on LMI.
Establish a realistic budget
Owning your first home is a wonderful feeling, but that glow can wear off quickly if your mortgage repayments force you to sacrifice the good things in life. So take the time to work out exactly how much you can afford to repay – now and in the future.
This is general advice only and doesn’t take into account your objectives, financial situation or needs. Conditions, fees and lending criteria apply and are available on request.
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