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The first time home buyer face extra pressure so if that is you I hope this information may provide you with extra confidence before entering the real estate arena.
I have prepared a list of some points that should be considered when you are buying real estate and organizing a home loan for the first time.
First
time home buyer tip 1. What is essential and what is not?From my experience with the first time home buyer I am sure a lot would find their home searching easier if they just wrote down a short list as part of their research on what they consider is an essential attribute and what they considered nice but not essential.
You probably find there are only one or two things on your list which really are essential, and with the price of real estate that may help to keep your shopping list realistic.
The benefit is it gets your mind thinking the right way so when you are looking you don't lose focus and get carried away about a property that looks good but doesn't meet your original criteria. This also helps any real estate agents that are looking on your behalf to narrow down what that show you and not waste your time .I would suggest two essentials for your list are;
1. List of your preferred suburbs. 2. Fix your price range and stick to it.
First
time home buyer tip 2. Can you use this property as a stepping
stone? Keeping a realistic budget in mind and aiming not to borrow any more that you have too is the key to success with real estate.
If you are a first home buyer chances are you are still young and you can probably get by with a smaller home to start with and move up to the larger more expensive property later in life. You will be a lot happier and better off with a mortgage that you can afford the repayments on.
Have you heard the term house poor?
It essentially means someone who has taken out a loan and got themselves in debt to a level that they can meet the repayments on their mortgage but that is about all they can afford.
Their lifestyle suffers considerably to the point they may as well be financially poor because they cannot afford to do anything except pay off their mortgage.
First
time home buyer tip 3. Capital growth factors in real estate.Position of course is the key; this refers to a lot including access to community infrastructure including transport, shopping, employment areas, schools, parks, sporting facilities, etc.
Views from a property are a capital asset and will always be valuable, any similar life style features that make the property desirable should also increase the property value over time.
Try to imagine what your new neighborhood will be like in 5 -10 years time.
New subdivisions generally have established gardens; street trees etc and in 5 years time they are a lot more fashionable areas to live in. Research which suburbs are becoming more desirable because of new developments, or have new infrastructure to be built and have easy access to facilities mentioned above and work centers.
First
time home buyer tip 4. Not what can you borrow, what should you
borrow!This has become a bit of a theme for me but please remember don't over commit with how much you borrow, just because that's what you are offered.
The banks are in the serious profits business!
Whatever the bank or loan institution offers you don't forget it's a loan which has to be repaid with interest.
Work out what you know you will be comfortable repaying on a mortgage and stick to that level. Please be aware changes of circumstances can and do happen; many people change jobs regularly, newly weds start families, interest rates can and do go up, these things can bring extra pressure financially.
First
time home buyer tip 5. Other costs involved.The fees described below are only a guideline and can vary from state to state in Australia so you will want to confirm with either your home loans broker and or your solicitor the exact fees you will most likely be charged.
Loan Application fee
Home/building inspection costs
Solicitor fees
Survey costs
Insurance
Title search costs
Mortgage insurance
There are a number of additional expenses you need to also take into account when buying a home including contents insurance, moving expenses and utilities connections when you finally move in.
First
time home buyer tip 6. Time frame to work to. Don't pressure yourself too much with time frames, expect to dedicate plenty of time to finding your new home, don't get disappointed if you don't find a property in the first week.
Remember it is a decision you will be living with for years to come.
That doesn't mean you don't want to be confident when the right property comes up, move fast and if you have done your homework you should know how to secure it in front of other buyers.
First
time home buyer tip 7. Research on prices.I know this is commonsense but common sense isn't that common.
Make sure you get a good idea on the price of homes in the neighborhoods you are interested in. Knowing the price of other homes in a neighborhood will help you avoid paying too much.
Here are some standard guidelines for organizing a mortgage and buying your first piece of real estate. Even though they may not be accomplished in the same order every time you will be more confident with your transaction when you have a basic understanding of what is required of you and everyone else in this process. The following steps are quite self-explanatory to getting a home loan ;
1. Organize your finances ( details of savings history, tax group certificates etc )2.Become familiar with the mortgage industry
3.Arrange pre-approval for a mortgage
4.Determine your wants and needs
5. Learn how real estate agents work
6. Start searching for a home
7. Handle pre-offer tasks
8. Make an offer
9. Arrange home inspections and other additional tests
10. Once decision is made and agreement in place get deal in writing as quickly as possible
Remember, these steps are a general guide. You will encounter issues specific to your location and your transaction. These issues can be best explained and handled by your real estate agent, and or your home loan broker or your solicitor and others who are helping you complete the home buying transaction.
Also remember, never hesitate to ask questions. You are making a long term commitment and spending a large sum of money; you will feel much better about the transaction if you stay informed and understand what`s happening each step along the way.
Good luck with your endeavors to own real estate; despite all the warnings its hard to find a better investment for your savings than your own home.
I have read that 90% of all millionaires have made their money in real estate.
I wish you well with your buying real estate experience if you have any comments you can contact us.