If you’re lucky enough to be riding the wave of new home-ownership that Australia is currently enjoying (see our recent article on why this is the case), we envy you. But, as buying your first home is a huge milestone in the lives of most, the process of selecting, financing and moving into your new home can be very daunting.
So to help get you started, here are our 5 top tips for new homeowners to help you navigate the pitfalls of getting in to your very own home.
Tip 1 – Check if You’re Eligible For Any Grants.
Every state and territory in Australia has some version of the first Home-Owners Grant, all of which can give you a big helping hand in affording your first home. These typically vary based on the value of the property that you’re trying to buy, where you want to buy, if the home is new or not as well as some other variables. Regardless, if you can get the First-Home Buyers grant in your state it’ll mean a big head-start for you.
If you’re planning to build a new home, check if you’re eligible for the HomeBuilder grant program. Intended to offset the impact of COVID-19 on the building industry, HomeBuilder was recently extended to the 31st of March and offers $15,000 for building contracts (including new builds and substantial renovations). HomeBuilder is means-tested and is offered to singles earning $125,000 or less or couples with a combined income of less than $200,000.
A big help if you can get it.
Tip 2 – Location, Location, Location…
As well as affecting your eligibility for the First-Home Buyers grants, buying in the right location can affect you in the long run. Buying for a family? Look into surrounding planning permissions and council plans as well as local school and family friendly facilities. Buying for space? You may want to avoid these.
Either way, checking into the future of an area will give you a good idea if it’s where you want to be down the track.
Tip 3 – Stick To Your Budget
Kind of obvious, but also probably the most commonly ignored on this list. Building a new home or shopping for an existing one can be exciting, and often the excitement of it all can blindside you at auctions and open houses.
This can lead to some really big mistakes that you can spend years trying to undo. You don’t want to be in a position where you have your dream home but can’t afford it. For your first time round a more sensible solution is to get into the housing market in comfort, rather than going big, and then work towards your dream. By all means go big and get the flashy optional extras – but only if you can afford them.
Tip 4 – Consider the Hidden Costs
This leads us nicely into point 4. Costs that lie coiled like a snake in the grass ready to bite us when we least suspect it. These could be things like soil type, the slope of your block or connecting to mains power.
These are all things that you need to plan and potentially budget for, so you don’t face disappointment (or worse) if they come up.
Tip 5 – Sort Out Your Home-loan.
When you first consider buying don’t forget to contact your lender. This will give you the best idea of your budget and preapproval, giving you the power to buy a property if you find the right one.
Make sure you stay in touch with your lender, because most preapprovals only last for 90 days. If you can’t find something suitable within that 90-day window, you’ll have to get another preapproval. And as we all know from COVID, a lot can happen to the housing market in 90 days.
When it comes to buying your first home, knowledge is power. Plan, plan, plan and research, research, research! The more you know the better your chance of finding yourself in a home that you not only love living in, but also won’t cripple you financially.
Good luck and happy house hunting!