Buying your first home
Buying your first home is exciting but it can also be confusing and frustrating if you have not done your homework or budgeted correctly. To help you get into your first home faster and without the often associated stresses, Coronis have compiled this guide to help you.
Getting Started
Once you have decided that you’re ready to own your own home, it’s time to sort out your finances. Start by working out where all your money goes. The best way is to write a list of all your expenses - include: loans, credit card payments, leisure activities, groceries, gym memberships and absolutely everything you spend money on. This will tell you exactly how much you spend and more importantly what you have left over so you can budget effectively.
Divide your expenses list into:
1. Primary Costs
These are costs that are regular essential payments, such as; rent, loan repayments, bills etc. Primary costs are unavoidable, however, look into better deals for services and consider consolidating debts to lessen payments. Plan grocery shopping before you go so that you do not impulse buy, and consider cheaper options to your habitual purchases.
2. Secondary Costs
These are costs that are non essential, such as leisure activities and extravagant or non essential purchases. Secondary costs can be ‘skimmed’ to boost the amount you can save. Think twice before making non essential purchases, such as expensive clothes or gadgets, and think of alternative social events rather than expensive nights out. Use your credit card for emergencies only and concentrate on getting the existing bill cleared.
Savings
Once you have established how much you can save each week or month, open a high interest account so that the money you do save, or have already saved, accumulates interest - this is money for nothing! Have the amount you can save deposited directly into your savings account each time you are paid. This will ensure that you are not tempted to ‘dip’ into it. Also, deposit any extra money you have managed to save through being frugal, the day before you get paid. The odd $10 or $20 here and there soon mounts up.
Credit History
Check your credit history before you apply for a loan. Finding out at a late stage that you cannot get a loan can be devastating - especially if an incorrect entry on your file is the reason. You can get a copy of your credit history from www.mycreditfile.com.au
Pre-Approval
Talk to one of our Mortgage Brokers about getting pre-approval for a loan. This lets you know whether or not a reputable lender would consider you financially sound enough to take on a homeloan ahead of when you actually need one and tells you how much you can borrow. This makes it far easier to apply for the ‘real deal’ when you find a property you want to buy. Your Broker will apply for pre-approval on your behalf. All you have to do is provide proof of income, expenses and assets. Call: 07 3105 5584
Get clued up on costs
At a time when every cent counts, avoid unexpected financial outlays by finding out exactly how much the process of buying your home will cost, aside from the deposit. Fees may vary or be culminated with others but commonly incurred fees are as follows:
Lender Fees
- Application fee
- Valuation fee
- Monthly service fee
- Mortgage insurance
Government Fees
- Stamp duty - In Queensland there is no stamp or mortgage duty on homes up to $250,000 and concessions up to $500,000
- Land transfer registration
- Mortgage registration
Other Fees
- Solicitor and conveyancing fees
- Search and enquiry fees
- Agency and sundries - includes settlement fee an disbursements fees
- Building report
- Pest report
- Home building insurance
Talk to one of our mortgage brokers about these fees as they will be able to give you an estimate of how much each will cost.
NB: Don’t forget the expenses of actually moving into your new home. Get quotes for things such as hiring a removal firm to shift your belongings and deposits for power connection and services so that you can include these in your final costs.
Putting all this structure in place means that you will then be able to set a time goal for when you can buy your new home. This in itself will help you stay focused and on track.
The next step
When the time comes for you to start looking for a property, talk to one of our Agents about anything you are unsure about, including what kind of property you would like to buy and the areas in which you would like to buy in. Also, read our ‘Doing Your Homework’ feature to help you buy a property that will be a good investment for the future.