Many young Australians trying to purchase their first home are struggling to get their foot on the property ladder. These five tips will assist first home buyers through the process ensuring you purchase the right property for you.
Many young Aussies trying to purchase their first home are struggling to get their foot on the property ladder. What should be an exciting time is often filled with disappointments and a general sense of being overwhelmed due to budget constraints and lack of experience with the property market. We often hear from First time buyers that by the time they have engaged our services, they had almost given up. They have attended auction after auction, only to be outbid with the property selling well above their budget and the agent’s initial quoting range.
Below are five tips to assist you through this process ensuring you purchase the right property for you!
Find a good Mortgage Broker
Many buyers go straight to their current bank to find out their lending capacity and to enquire about rates, often missing out on what would have actually been the best deal for their personal situation. Make sure you find a professional who can assist you in finding the right loan for you and your personal circumstances, minimising your interest payments and maximising the investment you can make in your first home.
Save the biggest deposit you can
Most lenders require you to have a minimum deposit of 10%, however if you have the ideal deposit amount of 20% you should not need to take out lenders mortgage insurance. Saving the most you can pre-purchase will also save you long term as your equity will be higher and your interest repayments will be lower. We would recommend ridding yourself of as much personal debt as you can to assist you saving and maximising your lending capacity.
Do your research
Make sure you are realistic about what you have to spend and the type of property you can buy for that within certain suburbs. Do your research based on sales results not quoted ranges by agents, as often these may seem within your price range when they are really not.
Consider all your options
For many First Home Buyers, the reality is that they cannot afford to purchase in the areas they would like to live in. Consider the option of buying an investment property in a more affordable suburb to get yourself into the property market and rent in the area you would like to live. Once you have built up some equity within your investment, this should put you in a better position to purchase within an area you would like to live.
Consider a professional and don’t be afraid to seek advice
Many first time buyers find the property search overwhelming and their lack of experience or knowledge puts them at a disadvantage when it comes to negotiations and their property search. It may be worth engaging the assistance of a Buyer’s Advocate or even having an experienced friend or family member give you some assistance to ensure you make the right purchase at the right price.
Original article: http://www.apimagazine.com.au/property-investment/first-home-buyer-tips