Professionals Real Estate 
There are three pieces of first home buyer advice that everyone breaking into the property market should pay attention to.
A slightly slower property market and some enticing Government incentives mean there will be more opportunities for first home buyers to enter the property market in the near future.
First home buyer advice
If you’re planning to make a purchase in 2023, these are three things you need:
- Pre-approval
Pre-approval sets your budget and means you can quickly get home loan approval after you have had an offer accepted.
While pre-approval isn’t an absolute guarantee that you will receive the loan you apply for, it should be fine if your circumstances don’t change between being pre-approved and submitting your formal application.
The vendor won’t care if you have pre-approval or not but if you have to go through the entire borrowing process with the bank after you make an offer, another buyer may come along who can move more quickly.
To get pre-approved for a loan, you need to contact your lender or mortgage broker and submit your application.
You will need to share the following details:
- Proof of your savings/deposit
- Your income
- Your living expenses
- Your debts
- Your residential status
- Information to confirm your identity
- A budget
Having a spending budget is essential before you buy a home because it will help you save your deposit and figure out how you will afford a home loan as well as your other expenses.
If possible, the budget you work with before your home loan should be similar to the one you have afterwards; this will help you prove you can manage all the associated expenses.
When you set your home buying budget, you need to understand that the price of the house is not the only thing you have to pay. An estimate by realestate.com.au puts the additional costs of a $500,000 home for a first-home buyer at more than $16,000.
Home-buying costs can include:
- Stamp duty
- Building inspection and pest inspection
- Mortgage registration fee
- Transfer fee
- Loan application fee
- Lender’s mortgage insurance
- Council and water rates
- Conveyancing and legal fees
You may be able to avoid paying stamp duty as a first home buyer, depending on the amount of money you spend and the type of home you’re buying. It’s also important to speak to your mortgage broker about whether you are eligible for an additional first home owner grant which could help you buy a home with a lower deposit.
- A plan for the future
In all likelihood, your first home will not be your home for life. It will probably be smaller than you initially hoped for or in a suburb that is more affordable. Most homebuyers follow a journey where they make a purchase, pay off as much of the loan as they can, then use their equity to upsize to a larger place.
Keep resale value in mind when you purchase your first home. Talk with your agent about the potential to grow the value of your purchase and stay in touch with them over time. Your real estate agent will then be there for you when the time comes to move on.
Ready to buy your first home? Get in touch with your local Professionals representative today.
