You will have to view a lot of homes before you finally find the one, but one thing you don't want is making rookie mistakes that will turn your home into a burden. Here are essential tips for first time home buyers looking to secure a home and peace of mind.
Save for a down payment
A general rule of thumb is to save at least 10% for a deposit towards a house. Not only does this show that you are a serious home buyer, but it can also help you assess if you will be able to afford to purchase a house. Lenders will also see you as less of a risk compared to someone who doesn't have a deposit.
Know how much home you can afford
Knowing what type of home you can afford can make searching for one easier. It also means that you can avoid taking on too much that can become harder to pay off later. You can make use of a home loan calculator to receive an estimate of what you will be able to afford.
Are you managing your current debt effectively?
How you manage your debt can be an indication to lenders on whether you will be reliable in paying off a home loan. The reality is that owning a home is expensive and without being able to manage the small debts you have can cause you to snowball into the red when owning a home. Aim to pay off your debt by starting off with the smaller amounts and gradually working your way to pay off the larger debts.
Consider the hidden costs
There are an array of once off-costs that you need to consider that go beyond the house price. You will have to factor in the conveyancing fees, transfer duty costs, deeds registration fees, moving costs, and home inspection costs to make sure that you are not purchasing a house that will be burdensome. The ongoing costs such as levies, rates and taxes will have to be budgeted for to see if you will be able to afford the long-term upkeep of your home.
Don’t skim on insurance
Insurance is generally considered a luxury, but it is a necessity that can help you and your loved ones when you need it the most. It can also help better position you when it comes to purchasing a home. Investing in life insurance gives lenders the assurance that your bond will be paid off in the event of your death. It also protects your family from having to pay off the remaining costs of your house, or even worse, seeing the home you worked for being repossessed. You may also want to consider building insurance to give you peace of mind.
