First Home Owners Guide
First Home Owners Traps
& How To Avoid Them
Buying your first home can seem like an enormous task in the beginning. There is so much information to digest on top of finding the home that's right for you.
With first home owner's grants to consider, the exemptions from stamp duty to apply for, not to mention making sure you get the right home loan organised, it can be difficult to know where to start.
By following a simple strategy and being aware of some of the traps that you face as a first home buyer, you can enjoy the experience of buying your first home as well as make sure you don't waste any time or money along the way.
Below are some actions to take that will help ensure you get the home you want at a price you can afford.
1. The 'B' word BUDGET
One of the more common problems many first home owners face is that the extra burden of paying off your mortgage compared to renting can place a strain on your cash flow.
This often leads to leaning on credit cards to make ends meet and starts a vicious downward spiral that can end in disaster.
Look on your budget as your financial speedometer. Just imagine trying to stay within the speed limit in your car if you did not have a speedometer. Your budget helps control your spending speed limit.
Once you start putting your budget together you will find it is not the 'Ogre' that you thought it would be. It can in fact be quite empowering. An important thing to remember is it does not have to be 100% precise, and you can fine tune it as you go.
What your budget will do for you is let you know how much you can afford to repay on your home loan an ongoing basis. No more stress or strain and you will be more confident you can own your own home without worry.
2. Home Loan Training Practice
One other thing you can do that is closely related to your budget is what I call Home Loan practise.
Once you decide on what you can afford as a regular mortgage repayment, I suggest that you start saving the difference between what you currently pay in rent and what you feel you can afford as a repayment on your first home loan. Maybe setup a separate savings or investment account just for this purpose.
The effect of this "practise" is you find out how paying for your first home will feel and as an added bonus while looking for your first home you will add to your deposit or indeed save a deposit where you would not have otherwise had one. Remember, the more you can contribute to your first home purchase the better off you will be.
3. Get you Finance Sorted
Once you have started the process you really should arrange for your finance. Having the information on how much you can borrow and having your home loan pre-approved can save you time and heart-ache once you find your first home.
Too many times I have seen first home buyers find the home of there dreams only to have them their purchase go wrong because they cannot borrow as much as they though they would be able to or can't find the money fast enough.
If two buyers are interested in the same property, the buyer who has their finance already organised has a huge advantage.
Get you finance arranged before you start looking for your first home, I can arrange a pre-approved home loan for you that will cost you nothing at all to set up, and when you do find your first home, and you have you home loan pre-approval in place, it has the potential to guarantee you get the home you want. Do be caught out.
4. You Gotta Shop Around
One of the biggest mistakes many first time home buyers make is that they do not look at enough properties. Many people fall in love with the first home they see and decide that there is nothing else out there that will suit them as well.
This of course is complete nonsense, there are literally thousands of home on the market at any one time and by looking at lots of them, you will not only get a good feel for the price of the kind of home you are looking for, you will be able to spot a bargain when one comes along.
