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Taking the leap into buying your first home

For most of us, it is one of the biggest financial decisions we will make in our lifetime. If you are thinking about purchasing your first home, you are not alone – in WA, first home buyers actually account for 25% of the home loan market.

You might have already found yourself wading through a maze of information, jargon and steps in the home buying process that you never even imagined existed.

While it can seem overwhelming, the best thing you can do when considering home ownership is to arm yourself with knowledge.

As well as being prepared financially, the process of buying your first home will be a lot smoother if you understand the steps, costs and concessions involved… and you’ll avoid any surprise expenses.

Here are our 7 top tips to give you the confidence to get started.

1. Budget – first and foremost

First things first – before buying a home, aim to get yourself in the best possible position financially. For example, try and pay down any high interest debts.

Being able to budget is essential not only for building up your initial deposit but for managing your home loan – and maintaining your home – in the future.

2. Work on your deposit

To get started, you will need some savings behind you. The bigger your deposit, the better a position you will be in generally when applying for your home loan – you can borrow more and even access loans with lower rates.

While you can take out a loan with a deposit of 5-10% of the property value, you will have to pay lenders mortgage insurance.

3. Consider a guarantor

Sometimes, to avoid paying LMI when your deposit is less than 20%, borrowers may have someone in their family who is prepared to use some of the equity in their property to act as a guarantor for part of the loan. You can learn more from our article on Guarantors here.

4. Know your options

The home loan market is both competitive and complex so it’s important to understand the different options available to you, including the benefits of different types of loans such as variable and fixed rate loans and split rate loans.  The Federal Government's Money Smart website has a wealth of information on home loans and when you're ready to learn more for your specific circumstances, we can put you in touch with one of P&N's mobile lenders, our Contact Centre or branch Lenders who can help determine the best deal for you. Details below.

5. Add it up

Your home loan deposit and repayments are the key pieces of the home buying puzzle you are probably already familiar with. However, you’ll also need to take into account stamp duty, as well as application, solicitor and building inspection fees. It's always important to be fully aware of all the fees and again the Money Smart website shows you how not to fall foul of fees.

6. Take advantage of concessions

As a first home buyer, you could be eligible for the first home buyers grant. At the time of publication, in WA, the grant is $10,000 for new home builds or purchases up to $750,000 or $1,000,000 depending on where in the state you are purchasing your first home. There is also no stamp duty payable for first home buyers on a new or existing dwelling under $430,000 and discounted stamp duty for first home buyers between the value of $430,001 and $530,000 which has the potential to save thousands of dollars. More information can be found on the Department of Finance Western Australia website.

7. Ready to buy… What now?

Get organised before you go to view properties you are interested in – get your pre-approval from your lender and you’ll be a step ahead.

Know what price you are willing to offer before entering into a negotiation – this comes down to researching the area and the market and, of course, knowing your budget.

8. Know what you are buying!

Just as you wouldn’t purchase a car without getting it checked, you need to make sure the property you are buying is not a wreck beneath the surface. This means getting building and pest inspections done and examining the property’s fittings as well as you can.

9. Call on the experts!

Luckily there are professionals to help you navigate every step of the way.

P&N supports members and new members through the lending process. We have mobile lenders that can come to your home, lending specialists in our branches and over the phone support within our Perth-based contact centre.

Contact us today to find out how we can help you.

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