Buying Your First Home? Here’s Where to Start

Buying your first home is exciting, but it can also be overwhelming, especially in a fast-paced property market like inner Sydney.

To give yourself the best chance of securing your ideal home, preparation is key, and there’s plenty to do even before you find the property you want to buy. Here’s how to get your ducks in a row so you’re ready to pounce the moment you find your dream home.

1. Get your finance ready

Having your finance sorted in advance means you can act quickly the moment you find a suitable property. This usually involves obtaining home loan pre-approval, also known as conditional approval or approval in principle.

Getting home loan pre-approval can help you understand how much you have to spend and give you the confidence to bid at auction or make an offer on a property. By applying for pre-approval before you find your ideal home, you are potentially speeding the whole purchasing process up by getting some of the paperwork out of the way before you’ve even made an offer.

While conditional approval is helpful, always remember it’s not a guarantee that you will be approved when the time comes to formally apply for a loan, particularly if your circumstances have changed, or if you’re planning to borrow more than 80 per cent of the property’s value and need to take out lenders mortgage insurance (LMI).

2. Apply for any grants and concessions you’re eligible for

There are several grants and schemes available to first home buyers, and it makes financial sense to find out if any of them could benefit you. Do your research for those that you intend to claim while you continue your search for your new home.

The Federal Government has three on offer:

  • The First Home Super Saver Scheme – this scheme allows first home buyers to build their home deposit inside their superannuation through voluntary contributions, thus giving them a tax cut. Compared to a normal deposit account, it can boost savings for a home deposit by at least 30 per cent.
  • The First Home Loan Deposit Scheme – this scheme eliminates the need for the full 20 per cent deposit usually required to buy a property. Instead, eligible first home buyers can buy a new home with a deposit as low as 5 per cent, with the Government’s National Housing Finance and Investment Corporation guaranteeing up to 15 per cent of the value of the property to participating lenders.
  • Family Home Guarantee – a new scheme giving eligible single parents with dependants the chance to purchase a home with a deposit of just 2 per cent. Income caps and other criteria apply, and it’s important to note that while first time buyers are eligible, you may also be eligible if you’ve already owned property before for this one.

And there are two available from the NSW State Government:

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Just researching the market?
  • NSW Stamp Duty Concessions – under this scheme first home buyers are exempt from paying stamp duty on new homes valued up to $800,000 and receive a concessional rate on homes valued between $800,000 and $1 million.
  • The NSW First Home Owner Grant – a $10,000 grant is available to first home buyers buying a house, townhouse, or apartment that is newly built, purchased off the plan or substantially renovated, provided the purchase price is no more than $600,000.

3. Have your experts on standby

Buying a home is possibly the biggest investment you’ll ever make, and you’ll need the help of some experts along the way. By lining up your trusted contacts even before you find the property you want to purchase, you’ll be ready to make a move the moment you find your dream home.

Solicitor or conveyancer – they deal with the legal side of buying a home and transferring the property out of the vendor’s name and into yours, including checking the sale contract for any unexpected surprises.

Building inspector (and maybe a pest inspector too) – you should be fully informed about the building and its condition before you buy. A qualified person such as a licensed builder, surveyor or architect can provide a professional building inspection report. A pest inspection is a good idea too. If you’re buying an apartment, start with the strata report to check that the building has undergone annual pest inspections.

Mortgage broker or lender – a good broker will work with you to find loan options that best suit your needs, explain the ins and outs of different loans and take care of the application and manage the process through to settlement. Establishing a solid relationship with a broker now can stand you in good stead down the track if you ever decide to refinance or want to make changes to your loan.

Buyer’s agent (if you want to use one) – there’s no doubt about it, buying a home can be a stressful and confusing experience, so you might choose to have a buyer’s agent in your corner. An experienced buyer’s agent can provide you with expert advice about the local market, help you to identify a property bargain (or an overpriced home), and bid at auction or negotiate on your behalf.

If you’re looking to buy your first home in Waterloo, Green Square, Redfern or Wolli Creek, contact us today.

Article by Brendon Clark
‘The details matter - through every part of the process.’ With decades of runs on the board alongside a fresh outlook, Brendon is co-director of Clark - and one half of one of Sydney’s most dynamic and successful real estate duos. Having carved out a reputation for results in the… Read More
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