5 Steps to Buying Your First Home!
Thinking about owning your dream home, but have no idea where to start? We’re here to help!
Buying a first property can be as daunting as it is exciting, but we’ve laid out a few first steps to help you start on the right path towards purchasing that forever home.
Step 1: Save Your Deposit
In order to purchase your first home, you will need to contribute a percentage of the property’s purchase price upfront; this is called a deposit. Although in some situations, such as presence of the First Home Loan Deposit Scheme, where you may only be required to contribute 5% of the borrowing price, generally financial institutions recommend you put forward a deposit of at least 20%. This would mean that on a $450,000 home, for example, you would be aiming to deposit $90,000.
This may seem like a lot, but it will save you money in the long-term as you will pay less interest and may be waved for some insurance costs.
Your deposit will help you get the best start for your loan, but where your money comes from can sometimes be just as important.
Step 2: Build-up Your ‘Genuine Savings’
Lenders like to see that you are capable of saving your own money. This ensures that you can be relied on to make your repayments on time. It is best to have a solid few months of genuine savings evident in your bank statements, to prove that you are going to be able to stick to your budget, and pay off your mortgage with minimal to no defaults.
Defaults can occur when you are late for a repayment and can also be something lenders look at in your credit history, so the next step is also an important one to get on top of.
Step 3: Check Your Credit Score
A credit score is a 3-digit number that represent your credit risk (i.e. the likelihood you will keep on top of your repayments). It may include your current and past credit accounts, information on your payment history and how much you owe.
Checking your credit history can help you better understand your current financial position. Lenders will always check your credit score when they assess your loan application, so it is important to know your financial position, and keep on top of your credit.
Step 4: Organize a Pre-approval With Us
Once you have your financials in order, it is time to get approved for your loan! A pre-approval is a proactive step that allows you to apply for a loan from a lender before you settle on a home. This way, when you find that dream house, you will be ready to purchase as soon as possible! Click here or use the contact form below to talk with us about getting your pre-approval and take that all important first step towards getting your first home.
Step 5: Find Your Dream Home!
Now for the fun part! Once you have been pre-approved, you are ready to purchase your property. When you find the perfect place for you, we will help you through the last few steps to securing your home and starting your home-owner journey. Happy hunting!