Arming yourself with knowledge is the best way to get what you want out of the home buying process.
1 - Know the Process
Getting to know he home buying process and what your options are is the best way to understand what you're in for. Ask friends and family what they did, and consider talking to a broker (we have a free 1 hour consultation appointment) who can answer any questions you may have about the process. The best place to start is by working out what's important to you, and what it is that you want. By narrowing down your options the advice you get will be more pointed and ultimately more helpful.
2 - Organise your Finances
This may seem like an obvious step, but its an important part to help you look more desirable to loan providers. Start by looking at your spending; what can you save money on? where can you cut back? Then take a look at your debt; try to pay off credit cards and outstanding personal loans. If you're able to, try consolidating your debt to make it more manageable.
3 - Start Saving
Ideally, you've already been saving some money. When it comes to buying a home, you'll need to do some calculations on how much money you'll need for a deposit. a deposit of 20% is ideal, but not essential. Although if it is less than 20% you'll most likely need to pay Lenders Mortgage Insurance (LMI). This can also be a daunting part of the process for many first home buyers, so if you're still feeling in the dark, feel free to come in for a commitment free chat with one of our financial planners.
4 - Get to Know the Different Property Types
Each property type comes with its own factors that need to be considered. You could be looking for your forever home, an investment property, an apartment, a house... the list goes on. Also consider whether you want to be close to public transport, schools, or if you want to be in a specific suburb. A great way to get to know the different property types is to browse real estate sites like Domain and Real Estate .com, as well as going to open homes and talking to real estate agents.
5 - Explore Home Loan Types
When you know what property type you're after, you'll have a better idea of how much you need for a deposit and other upfront costs you may have to pay. As far as figuring out loan types, this can be an incredibly long and difficult process if you don't have experience in the finance industry, or the time to research loan types and talk to banks. This is where having a broker comes in very handy; we do all the legwork and compare thousands of products in order to find you the right one. If you go to a bank to ask about home loans, they will only be able to tell you about their products, whereas brokers are able to compare all of the products on the market and be upfront with you about the pros and cons of each one.
6 - Get Pre-Approval
Getting pre-approved finance is a fantastic way to get some certainty and security around your offer. If you haven't found your dream property yet, but know how much you want to sped, getting pre-approved finance means that when you do fine a property, you can already say that your finances are in place. Again, if you're not confident in doing this yourself, our brokers at AAA do this for most of our clients.