Here’s everything you need to know to buy or build your first home this year.
Being a first home buyer can, at times, feel like a marathon where you’re starting 50 paces behind everyone else. It’s a major financial achievement that takes diligence and fortitude. It takes preparation and resilience. It’s a major milestone that requires research and work.
It’s no small feat, but we’re making things a little bit easier with our guide on everything you need to know to buy your first home in 2019.
It’s a buyer’s market
In case you haven’t heard, the real estate market is favouring the buyer in 2019. Without boring you too much with the specifics of economics, demand, markets and all that technical mumbo-jumbo, residential prices have seen a dip along with demand. This means competition has eased up for houses, causing prices to fall.
Along with better pricing, this year has seen plenty of schemes, grants and programs enter the scene, making it even easier for first home buyers. Along with government funds (more on that later), low or affordable deposit lenders are making it even easier to find first home ownership success.
It’s a prime time to enter the market, with many experts predicting things to get even better for buyers. But just know that real estate is a fickle beast. It’s best to strike while the iron is hot. Rather than playing the market, focus your search and make the purchase if you find what you’re looking for.
Know your finances
It’s never been more important to keep those finances in tip top shape. While the market may be favouring the buyer this year, that’s not a guarantee that lenders will fork out the dough. It’s true that there are plenty of schemes and programs to help out first home buyers — heck, even the APRA is making it easier to get a home loan — but banks and lenders still need to keep up on their due diligence.
Reviewing your credit file and current finances is part of the standard process, but 2019 is seeing lenders combing through financial histories with a fine tooth comb. It’s all in the name of making sure you’ll be able to make those mortgage payments.
So, what can you do to make sure you’re credit history is looking camera ready? Show that you’re a saver, not a spender. Cut out unnecessary costs, pay down your debts (even Afterpay purchases) and lower your credit limits before you start looking for your first home. When it’s time to get pre-approved, you’ll look like a much more appealing home loan candidate.
Save, save, save!
It goes without saying that you’ll need to save up for your first home, but we don’t necessarily mean saving only for your deposit. It’s true that saving up a deposit will start you off on the right foot, but no or affordable deposit lending programs can be an effective way to overcome this hurdle for some.
As mentioned (see above point), getting a home loan in 2019 is about showing your lender that you have the discipline to meet your financial obligations and pay off your debt. In addition to cutting out frivolous spending and paying down your debts, there are other saving steps you can take to impress lenders.
Before you begin your housing search, do your research. Use home loan calculators to estimate your repayments. Then set out stockpiling those payments in your savings account to demonstrate that you’re capable of meeting the demands of your mortgage.
Do your research
To take full advantage of the buyer’s market in 2019, you’re going to want to do a lot of research to find just the right fit. Start off by thinking about what you need in your new home. Think along the lines of:
- apartment or home
- new or existing property
- bed and bath count
- floor plan layout
- allotment size
Once you’ve settled on the most important aspects of your first home, you should then think about the future. We know, we know, as if it wasn’t enough pressure buying a home that meets your needs now! But thinking about the future of your home, and how it fits in with your plans, will help ensure your property continues to grow in value.
If this is your first home purchase, chances are you’re not going to live there forever, so it’s worth doing your research on the suburb and surrounding property values. Look into proximity to public transport, demographics, flood maps, amenities and schools — these are all things that will boost the home’s value and make it easier to sell down the track.
Finally, after you’ve attended a few inspections and narrowed your search to the right one, make sure you do your building and pest inspection.
Take advantage of First Home Owners Grants
If you want to get more bang for your buck, look no further than first home buyers grants offered up by your state’s government. Even in 2019, there are still plenty of programs and schemes available to help out first home buyers.
Whether it’s waiving stamp duty, or off-the-plan concessions, First Home Owners Grants (FHOG) can really help you get a leg up in securing your purchase. Do a bit of research in your state to see exactly what’s on offer: