How to stop renting and get on the property ladder
The property market can be extremely daunting for first-time home buyers, but switched-on young people all over Australia are getting into the market every day. Here's how.
Buying a home is an important life event for many people and, when you get all the details right, it can be a very good financial investment as well.
Here is an introduction to the benefits of owning your own home and how to get into the property market for first-time home buyers.
The benefits of buying your own home
There are a number of benefits to buying a home instead of renting. Probably the biggest of these is the financial benefit. Instead of paying rent to your landlord, you’ll be building equity in an asset that will have substantial value in the future.
Owning your own home also means that you’ll have the freedom to renovate, paint, and landscape it as you please. Not only is it great to have your home exactly as you want it, but your work will also improve its value.
4 tips for buying your first home
1. Find the right property
Finding the right property is one of the hardest parts of getting into the property market. You need to think about the features you need, like the number of bedrooms, parking, proximity to public transport, schools, and more. Not only that, but you need to think about which suburbs are likely to grow in value in the near future. Finally, you need to tick all those boxes in a property that’s in your budget.
It’s no easy task, and there can be stiff competition for a property that’s perfect for you since it might be perfect for several others as well.
2. Check your eligibility for the First Home Owner Grant
Depending on your circumstances and the property you buy, you may be eligible for the First Home Owner Grant. The grant is administered by the states and territories, so there may be different criteria depending on where you live.
It’s important to find out if you’re eligible for the First Home Owner Grant since the extra cash could be the difference you need to get into the property market.
3. Check your credit and your finance options
Your credit history is extremely important when it comes to buying your first home. Having good credit can help you get a lower interest rate on your home loan, and you may be able to get approval for a higher loan amount. However, there are other factors that a lender will consider including your income, debt, and employment history.
Speaking to a finance broker can help you understand you finance options, and they may be able to help you get a lower interest rate. This can be especially helpful if you're looking for a bad credit home loan because a finance broker can advocate to lenders on your behalf. That way, a lender will see the strengths of your financial situation instead of just your credit history.
4. Understand the paperwork
Once you’ve found the perfect home and you’ve made an offer or won the auction, the next step is the settlement. This involves signing the contract of sale and transferring the funds for the property to the seller or the seller’s mortgage holder.
It’s always a good idea to have a lawyer or conveyancer look over all the paperwork before you sign it if you’re not a legal expert. The paperwork can be quite daunting for first-time home buyers, and any mistake could be very costly. Buying a home is one of the biggest financial commitments you can make, after all.