First home buyer FAQs
Buying your first home can be a daunting experience; after all it’s a big commitment and involves a lot of money. To help you on your journey, we answer some of the most common questions asked by first home buyers.
How much money will I need?
At a minimum, you will need a 10% deposit plus enough funds to cover legal fees, a building inspection and stamp duty. If you buy a property with a deposit of less than 20% of the purchase price, most lenders will require you to take out mortgage insurance as well.
Is it better to save up more or buy now?
If interest rates are low and the market is rising, the growth in property prices will usually outstrip your ability to save. That means it’s often better to purchase your home as soon as you can afford it.
Where should I buy?
The best location is different for every homebuyer, depending on their needs. Start with the locations you would like to live in and where it’s convenient for you to travel to your work and to visit family and friends.
I like the suburb but I don’t know it that well?
The best way to get know an area is to research it online, then go and see it in person. Start by searching for properties you like and then go to the open inspections. Talk to the agents about the area and on the way there and back; keep your eyes open for traffic issues, construction sites, transport, shopping centres, parks and schools. Once you have visited around a dozen properties, you’ll start to get a good feel for where the best locations are.
I’m not really sure what this property will sell for?
The best way to estimate what a property is likely to sell for is the recent sale prices of similar properties.
Should I get a building inspection?
If you are a qualified builder, engineer or architect then you are more than qualified to assess a property for faults. If you’re not, then a building inspection is a necessity. Why? Because properties which look fine may have structural faults, problems with the electrical wiring or plumbing, termite infestation or a number of other issues which can be expensive to fix – very, very expensive.
Is it better to buy a house or an apartment?
That depends on where you are buying, your budget and why you are buying a property. For first homebuyers in major cities, buying the right apartment is great way to get into the market and get on the track to buying a house later. If you’re in a country town or regional city, it usually makes more sense to buy the house you want to live in for the long term.
I can’t afford to buy on my own – can I buy with someone else?
You can buy with a friend or a family member, so long as you do it the right way. Before you buy, you and your property buddy should work out what proportion of the purchase price and mortgage repayments you will each be responsible for and most importantly, what happens when one or both of you wants to sell. Then have your agreement drawn up into a contract up by a solicitor and when you buy, make sure your purchase is recorded as tenants in common not joint tenants.
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