5 Fundamentals for First Home Buyers

By Andrew Vatovec, YBR Home Loans Zetland

I recently worked with a client who had reached out because, yet again, their landlord was putting up the rent (the third time in the past 18 months). The rent increases were really starting to impact the amount they could save each month to build up their deposit for a home. It was just getting too hard to watch their hard earned first home deposit go straight into someone else’s bank account. 

I was able to help them determine their borrowing power and inform them that, not only did they have enough to get into the market, but there were a number of lenders who they would be eligible to seek pre-approval from. They were surprised but VERY happy to begin searching for that first home and finally wave goodbye to renting for good. The confidence shift in just a few days was incredible to see – from fretting about their savings being diminished time and time again, to recognising that over 30 lenders were available to them, and that they had enough to crack the market. 

Time and again new clients come to me with a similar story. They’re looking to buy their first home and get out of the rental circuit. Rents are going up and up and when you’re working towards that deposit goal by working hard on your savings, it’s important to stay informed about the all important question: how much can you borrow?

Clients are often curious to see how much borrowing power they truly have and where to start looking to buy. It’s fantastic to be able to help them answer these important questions because the truth is that buying your first home is an amazing experience, but, as a first-time buyer, you want to make sure you have all the necessary information and guidance to navigate the property market with confidence. And get out of the rentals for good.

So what do you need to know? Here are five essential tips to help you make informed decisions when purchasing a home, whether it’s at an auction or from a listed property. 

1. Get Your Finances in Order

It’s the number one question I hear everyday: ‘How much can I borrow?’

And it’s a great question – before embarking on your home buying journey, it’s crucial to assess your financial situation. You’ve got to determine your budget, including how much you can afford for a down payment, work out your monthly mortgage payments, and look at additional costs such as maintenance, insurance, and property taxes. This is what we do. Consulting with a mortgage broker can help you understand your borrowing capacity and explore suitable loan options – we can provide clarity on your borrowing capacity and show you just how much you can save per month that can go towards a new mortgage and a new home.

2. Research, Research, Research

Knowledge is power in the property market. 

If you’re looking to buy, take the time to research various neighbourhoods, property types, and market trends. If you’re considering buying at an auction, attend a few to get familiar with the process and observe how bidding unfolds. Thoroughly research amenities, schools, public transportation, and future development plans in the areas you are hoping to purchase. Take the time to educate yourself about investment strategies, lender requirements and key features of the property market. 

This can get confusing but we can help you through this and help you understand your options – clients that take the time to be well-informed feel confident to make decisions that are right for them.

3. Engage Professionals:

Clients often come to me feeling overwhelmed, they just don’t have the confidence to take those first steps, especially as first time buyers.

4. Seek Pre-Approval:

Once you and your broker have worked through your financials and determined your potential borrowing power, we’ll help you identify lenders that will support pre-approval for first home buyers in your particular circumstances. 

Pre-approval gives you a clear understanding of your borrowing capacity, making it easier to set realistic expectations and narrow down your property choices. It also demonstrates to sellers that you are a serious buyer. Partnering with a mortgage broker can streamline the pre-approval process and help you secure a competitive loan offer.

Clients are often surprised about how much they can really borrow and also about the variety of lenders out there that might support them. Knowing your broker has helped identify lenders that might work for you gives you the confidence to go out and get that pre-approval before really digging down into your property search.

5. Understand the Purchasing Process:

What happens next? Well, the actual process of buying a property can be thrilling but also daunting for first-time buyers. It’s crucial to understand the steps involved, whether you’re hoping to buy through private or auction sale, so let’s take a look at the key steps you would take to close the deal on that first home. 

When you find a property you would like to purchase, your first step is to contact the real estate for a contract of sale – this contains relevant terms and conditions associated with the property and should be reviewed by a solicitor or conveyancer – they will also negotiate any changes you wish to make to the contract and check property rates and taxes.

Make sure you conduct thorough due diligence on the property before the auction or purchase, including inspections, title searches, and legal advice if needed.

You’ve got this!

Buying your first home is an exciting and life-changing experience. Following these five essential tips will help you become well-equipped and confident when navigating the property market. Remember to get your finances in order, conduct thorough research, understand the purchasing process, engage professionals, and seek pre-approval.

If you’re looking for the right kind of support as you work towards your property goals, reach out to me today, and let’s start working towards your future together.