Tuesday, 3 May 2016

How to Safely Plan Your First Home Buying

Buying your first home needs careful planning and important budgeting too. Here are some useful points for you to keep in mind while planning for the total cost of buying a home that covers insurance, mortgage, legal and other fees etc.
  • Saving for a deposit on a first home
  • Choosing what and where to buy
  • Getting a mortgage on a first home
  • Moving-in costs
  • Ongoing costs
  • Where to go for help

Initial Deposit Needed When Buying a First Home
Lenders in the country make it mandatory that you’ll have a deposit of at least 20% of the amount you’re borrowing. For example, you should have around $120,000 when planning to buy a house for $600,000.  Also enquire about the Welcome Home Loan Scheme, which stipulates a saving deposit of only 10%. Here we have to remember that if there is more money in your deposit, you need to pay less interest. So plan your budget accordingly to save maximum. The cuts you make on your household expenditure are worth for the cause as you are going to have your own home!

Choosing What and Where to Buy
Choose your house wisely. Reliable real estate websites can be searched to find out how much properties are worth in different places.

If you want to purchase a property as an investment, as well as a place to live, first consideration should be about resale or rental potential. Check out the interest rates of the banks in such case.
Other points to consider are transportation facility, distance to schools & hospitals, and feasibility of rental market.

Getting Mortgage on a First Home                                  
Be careful and cautious while choosing a mortgage because the interest rate, fees and degree of flexibility varies with different types of mortgages. Over time, repayments could add up to a lot more than the cost of the home. Better to use the servicers of a qualified mortgage broker and get all the mortgage legal formalities checked by a lawyer before buying your first home.

Check Builders' Reports and Land Information Memorandum (LIM)
Before you put all your investment on a home loan, make sure that you’re getting a safe home. Get a builder’s report which will help you to find out if there are existing flaws with your house building structure. Same way get LIM through the local council or your lawyer to know about possible problems with the land where the house is built. LIM will contain information on drainage issues or landslip risks, if any.

Take a Note of Other Costs Involved  
Other than the basic requirement of the ten or twenty percent deposit, you need to have funds for moving-in costs such as house moving services or truck hire, renovations or additional purchases for the new home, legal service and builder’s reports etc. And also take into account ongoing costs such as insurance, rates etc. As a first homeowner you become a ratepayer. Stipulated by local councils, rates include charges to cover the cost of things like roads, water supply, sewerage and parks, amounting to thousands of dollars a year.

Regarding insurance payment, there are house and contents insurance, life insurance and mortgage repayment insurance. The Lenders Mortgage Insurance is not for the homeowner, it covers only the bank in the event of non repayment of the loan from your end. If you’re buying an apartment, insurance for the building will normally be included in the annual body corporate fee that’ll also contain costs for maintaining common areas etc. Anyway, there will be contents insurance that you’ll have to manage separately.

Remember the Affordability Criteria
Once you are committed to a home loan, your regular home budget won’t be the same again! You’ll have to compromise certain things as you are going to possess a very big asset in your life- your beautiful, happy home! Include all the above said costs into your total budget, and do a thorough calculation to see if you can afford the house you’re going to purchase. Good to consult a lawyer before you proceed further.

This information is brought to you by the research wing of Select Home Cleaning, providing regular home cleaning, seasonal cleaning and move-in and move-out house cleaning etc. 

No comments:

Post a Comment