Real estate

Time to Buy? What you need to know before you buy your first home

Dreamed of owning your own small piece of the countryside for long enough? Fallen in love with a house on a quiet street close to good schools and tired of renting and paying someone else’s mortgage? Buying your first home is a big deal and there are a few things those who have already taken the step often wish they had knew before making the decision.

Plan, plan, plan

They say the three most important things when looking to buy a new home are location, location, location, but planning, planning, planning is just as important.

  • Work out your financial goals.
  • Be honest about your current financial situation.

You might be wanting to build your first home, buy an apartment, renovate an older home or buy a property to rent out as an investment, either on your own or with a partner, friends, or extended family members.

For most of us we will need to save a deposit – this is usually about 20% of the total value of the property – and then lend money to cover the rest. Having a bigger deposit and with a plan to pay off the home loan faster mans paying less interest – there are some excellent mortgage calculators online to help you figure out how much you will be repaying based on different interest rates.

While it is very exciting to start searching for houses or going to open homes there are a few essentials that should be covered off first:

  • Talk to bank or mortgage broker about applying for pre-approval for your loan. If you find a home you like you will be in a much stronger position to offer if your finance is already lined up.
  • Engage a good property lawyer for the same reasons.

Work out how much you are willing to spend on your new home – and know you can afford the repayments – and how much land, how many bedrooms, garages, bathrooms you would like before you start looking.

Knowledge is king

Understand the buying process of the country and state you live in. In most areas, a home is sold through a licensed real estate agent with properties advertised online and in newspapers. Once you know your budget and needs you can contact local real estate agents to let them know you are looking.

If you are not sure about the sale method being used – advertised price, auction, tender, negotiation, or by deadline sale be sure to ask the real estate agent or your lawyer.

In general – and this might be different depending on where you live:

  • You will make an offer by filling in and signing a legal sale and purchase agreement. You will state how much you will pay for the property including the deposit, any conditions, and when the change of ownership will take place.
  • The seller will also sign the contract and then all work to meet the conditions. The agreement will go unconditional once these conditions have been met.
  • The settlement date is when you will need to pay the balance of the purchase price and you become the owner of your first home.

Dreamed of owning your own small piece of the countryside for long enough? Fallen in love with a house on a quiet street close to good schools and tired of renting and paying someone else’s mortgage? Buying your first home is a big deal and there are a few things those who have already taken the step often wish they had known before making the decision.

Wondering about low deposit home loans?

  • In some cases – and you will need to check this with your lender – if you are building you may not need a 20% deposit.
  • In some areas if you buy a newly built home (within six months by a developer) you might not have to pay a 20% deposit.
  • In some countries the government has a public building programme for affordable homes and if you qualify you might not have to pay the 20% deposit.

Chat to your bank or mortgage broker if you think these apply to you.

Get back up

Buying your first home is much easier if you have the right team backing you up.

Sort out your finances first. An experienced mortgage broker can save you money.

The real estate agent will answer all your questions but they are working for the seller, it is always a good idea to talk to your lawyer. You will be reading, having to understand, and sign legal documents and a lawyer will be able to explain what you are committing to.

If you have found a property you like it is a good idea to have it inspected by an accredited inspector who understands local houses and council laws.

Friends and family can give good advice – and sometimes help with a deposit, but always get qualified advice before you put pen to paper.

And finally…

As a first home buyer in some countries you might be eligible for help from the government if you meet certain criteria. It is worth looking into this before you start putting properties on your wish list.

Once you have made a plan, you understand the buying process and have a good support team becoming a first home buyer is a whole lot less challenging – good luck!

A post by Kidal D. (3972 Posts)

Kidal D. is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.
Chief editor and author at LERAblog, writing useful articles and HOW TOs on various topics. Particularly interested in topics such as Internet, advertising, SEO, web development, and business.

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