Handing the keys to a new home owner

6 Things You'll Wish You Thought Of Before Buying Your First Home

Handing the keys to a new home owner

If you’re saving up to buy your first home, it’s a good idea to get as much information as possible regarding every aspect of purchasing a property. Below are our tips for what to look out for as a buyer, so that you can make the best possible decisions for your circumstances.

1. Property Market Cycles

Property values can rise due to strong market growth, remain steady or even decline during certain phases of a property cycle. It’s ideal to know where the market is within the cycle to ensure you secure the best possible price when looking for your first home.

2. Common Hidden Costs

There are a number of hidden costs associated with a property transaction that you should find out about and ensure you budget for. These include:

  • Stamp duty
  • Loan establishment fees
  • Lenders mortgage insurance (LMI)
  • Conveyancing/legal fees
  • Pre-purchase building and pest inspections
  • Building insurance
  • Rates adjustment
  • Utilities connection

3. Borrowing Capacity

Before you search for your first home, it’s important you know your borrowing capacity. This gives you an indication of what you can afford or help you budget in order to increase your borrowing power and afford your desired home. Your borrowing capacity is the sum of money someone can borrow from a lender.

This amount varies for each person according to their unique circumstances including factors such as income, employment, credit history, general living expenses and current assets. The amount you can borrow also changes with each lender, meaning you can have a number of borrowing capacities with different lenders. Use our borrowing capacity calculator for an estimate.

4. How Pre-Approval Works

A home loan pre-approval is when a financial institution gives you an estimate of how much you could borrow for a home loan. It involves applying to your selected lender who will assess whether you’ll be able to repay a loan. Most lenders offer conditional pre-approval for three to six months so you can look for a property that fits that amount.

5. Co-Buying

If you’re struggling to afford your first home, another option is to pool your resources with someone else and buy together as co-buyers. Friends, family or your partner, are likely to be your main choices. Keep in mind that if any of your co-buyers have owned property before, you won’t be eligible for the first homeowners grant or stamp duty exemptions or concessions.

6. Buying Off-the-Plan

Buying real estate off the plan means committing to buying a property that hasn’t yet been built. This can be more affordable and flexible than buying an existing property. However, there is also the risk of the development being delayed, failing to go ahead or finding that the final product is different from what you thought it would be. So long as you choose a reputable developer, these problems can be avoided.

For More Information, Contact McDonald Jones Homes

Our exclusive in house team at MyChoice Homes Loans are an approved lender for the Australian Government's First Home Loan Deposit Scheme (FHLDS) and are determined to assist First Home Buyers to achieve their dream of new homeownership.

Explore our FAQ or resources page for more helpful information for first home buyers. If you’re interested in finding out about financing your first home or want to look into some quality new builds, get in touch with McDonald Jones Homes.

Visit one of our Display Homes, to speak with a McDonald Jones Building and Design Consultant to find out more about the new scheme and the type of eligible homes and packages that we offer.