Buying your first home is a huge decision and step to take in life, so it must be met with some planned action steps. Preparation is key and it’s never too early to plan ahead.
We’ve listed 5 tips to help prepare you for your first home buy.
- Build up a deposit
In order to prove to any future lender that you are a ‘safe bet’ it’s a good idea to build up a deposit. As a general rule of thumb, the bigger your deposit, the better – and, the less you have to borrow, which will help to reduce your mortgage repayments.
- Get into good saving habits early
Having a history of regular savings into your bank account could make it easier for you to get a home loan later down the track. So, make sure you get into a good savings plan early. Set up a new budget and practice living on it. Work in the additional costs of owning a home like additional bills, repair and maintenance costs, and include any extra that you would pay for a mortgage. This extra money can go straight towards your deposit.
- Check your credit history
Before you apply for a home loan, it is a good idea to check your credit history. Are there any black marks against your name? Perhaps you forgot to pay a phone bill once upon a time? Any black marks against your name can significantly impact your chances of securing a loan. Thankfully, there are a couple of companies that can provide you with a copy of your financial history and let you know whether there are any problems on your credit record that you need to clear up before applying for a home loan. It is important to note that if you do conduct multiple credit history checks, be aware that lenders can see this and may potentially see this as a concern.
- Call your broker and organise a pre–approval
With your credit history in check and a deposit built up, it is often a good idea to seek pre-approval before you go shopping for a home. Pre-approval will give you a good idea of what you can afford, which means you won’t look at properties that are outside your budget. Your local Mortgage Choice broker can help you gain pre-approval by comparing hundreds of home loan options from a variety of lenders.
- Let the search begin
Now that you have built your deposit, sought the expert advice of a mortgage broker and organised pre-approval, it’s time to step up your search. Monitor the market closely, research different suburbs and look at a range of different properties so you can get a solid understanding of what is good value and why.
