Buying your first home for you and your family is perhaps the biggest financial move you’ll ever make. Whether you’re looking for a property that you’ll eventually swap for another one or a ‘forever home’ right from the get-go, there are just so many variables involved that you can sometimes start suffering from a wee bit of analysis paralysis.
That’s where we come in. In this introductory guide, we’ll give you the major points you need to consider before starting your search for a new home.
The first question you need to ask yourself is whether you are actually in the right position to buy a home. Let’s start with the obvious point first: the money. While buying is usually cheaper than renting, we often underestimate the costs of purchasing a home. There are home repairs to consider, additional utility costs, taxes, insurance, you name it. These are all costs that will hit you when you first buy a home (surprise!) and also on a monthly basis. Don’t just think of the monthly mortgage payments, there are loads more that make up the bottom line.
And the issues aren’t just financial. Buying a home can pin you down. If you buy in the wrong area or before a financial downturn, it may be very difficult to shift your property. If you’re used to moving around easily or if you’re planning on buying a larger property in a few years, it may not be as easy as you think.
If you’ve decided you’re ready to buy a home, congratulations! Before you get all excited and start looking for properties, we recommend you explore your home loan options carefully first. Depending on where you are, you may need to get pre-approval before being able to put a bid in for a home.
Don’t sign up with the first loan you see; most people make the mistake of going with their current bank and getting a loan there. Don’t do this. There’s usually a better deal out there. Find the best option by finding a reasonable website with home loan advice, getting in touch and meeting with mortgage brokers, and asking trusted friends and family who they’ve used in the past. Build a spreadsheet and work out the best overall deal.
The problem with most home loans is that banks will give you more money than you can probably afford. The multiplier on your salary on which lenders base their calculations are far too generous.
The main problem isn’t the banks and how much they’re willing to give you, however. It’s you. Most will completely fall in love with a particular property and will go far beyond what their budget allows. This is especially dangerous if houses are bought through a competitive bidding system.
Our advice? Stick to your budget no matter what. Give yourself a wee bit of wiggle room, but not more than that. If you start going into the five-figure mark, seriously consider backing out. There are plenty of homes out there that will be perfect for you and your family. Be patient.
Buying a house is about more than just the house. Let us explain. We’re basically talking about the area you’re going to be living in. That’s just as important (if not more so) than the actual property itself. Ask yourself these questions:
This step should not be part of simply ticking a box. You need to arrange a thorough home inspection with a trusted third party. You want a company or individual who will inspect the house in detail, will leave no stone unturned and will deliver a signed document with a detailed list of everything they’ve gone through.
Keep in mind that not every home inspection is created equal. Some will not test for mold or pests, for example. Others will check the interior, but skip the roof. Potential owners also don’t like being the annoying buyer and will stop themselves from asking relevant questions.
But you shouldn’t feel this way. If you have doubts, are wondering whether something needs to be looked at in more detail, or you simply want to go over the small print, talk to your home inspector without holding back. After all, you’ll be stuck with your decision once the keys have been handed over!
We hope this guide has given you a new perspective that will help during the buying process. Bear in mind, however, that it’s ultimately your choice and responsibility. Do your due diligence, scour the web for relevant advice, and ultimately do what you think is best for your family.
Sofia is a passionate writer from Sydney. She also enjoys decorating houses and engaging in home renovation projects. That is why she loves sharing her experience and advice with other people through her writing. Besides this, she loves technology and gadgets which can help us get through a busy workday.