7 common question first home buyer experience

It is normal for first-time homebuyers to be overwhelmed by the buying process. It is common to be stressed with the procedures and terms. 44% of home buyers feel nervous, while 2 in every five buyers are anxious. The house-hunting process without proper preparation is a roller coaster. You may even view more than 6 houses before deciding to pick one. Many homebuyers even regret purchasing the property. In every 10 buyers, one of them experiences remorse while the other 13% end up overpaying at the time. Nonetheless, being prepared can prevent doubts about buying a house.

These are some of the common questions that homebuyers face:

1 How to save for a deposit

The biggest challenge for the first-time homebuyer is to save for the deposit. Typically, a borrower needs to deposit 5% to 20% for the property. It is best to have a 20% deposit to avoid lenders mortgage insurance. You can set a goal, make a budget and start your saving habits.

Try to do 50:30:20. Have an additional 2 saving accounts and set an automatic rule for 30% of your salary to transfer into account #2 for your wants and 20% of your salary to transfer into account #3 for your goals. Keep the 50% in your main account for your needs.

2 Where to find an affordable house?

The price of properties keeps surging. It can be a bit of a challenge to find an affordable home. However, if you cannot find something that you can afford. Perhaps review the following

• The type of property you are looking to buy: apartment over a house.
• Location of the property: buy in a less expensive suburbs.
• Buy a house with dual dwellings. E.g. a house with a granny flat in the back will allow you to rent that out and use that rental income toward your mortgage repayments.

Alternatively, you can buy for investment purposes in an area you can afford and rent to live in an area that suits your lifestyle. This is called rentvesting, This will give you a step into the property market and start building your portfolio.

3 Which factors affect my credit score?

Each one of us has a credit file. If you pay your loans, bills, and credit card on time, your credit file reflects this to show good financial management. If you failed to pay your bills or credit cards on time it’s being recorded on your credit file. If you have multiple credit inquiries over a short period of time, that might also affect your credit score. Most lenders will check your credit file for bankruptcy, defaults, or bad financial management habits. Some lenders use the credit score to determine the interest rate they offer you.

You should frequently check your credit file. You have the right to know what’s in your credit file & fix any details that are wrong. You can receive a free copy once a year through these agencies:
– Equifax.com.au
– CheckYourCredit.com.au
– Experian.com.au

Get in touch if you need help ordering a credit file.

4 What amount can you afford?

Are you financially ready to own a home? The bank may approve your mortgage, but your biggest concern might be maintaining your lifestyle. A MFAA/FBAA finance broker will listen to understand your goal, analyse your income, monthly expenses, and all current liabilities, and recommend a loan amount or consolidate other debts so you can repay comfortably while maintaining your current lifestyle.

5 Are you ready to purchase a home, and what are your priorities?

Before buying a home, you need to ask yourself the hard questions. Analyse if you have a great history of saving, managing debts, and whether your job is secure. Additionally, determine if you can afford to pay insurance, taxes, mortgage, utility bills and maintenance expenses. It is also paramount to know your priority before looking for a home. List essential features of your dream house and do your research to minimise all risks. It will make your decision-making easier and eliminates the feeling of buyer remorse later.

6 Is hiring a buyer agent necessary?

For a fee, you can engage a buyer agent to save you time and make your buying process smoother. Let the buyer agent know your budget and ideal property criteria. Since they have access to both the market listings and the market, they will help find you the property sooner. They will also inspect the property and negotiate with the seller. Saving you time. Each buyer agent’s offer is different and might focus on a different location, talk to a few agents to see if their value aligns with yours.

If you are short of time and/or having problems finding the right property, or simply need help with negotiation and/or inspecting a place maybe seek the help of the buyer agent. The cost of doing nothing most likely will outweigh the buyer agent fee.

7 Where to get the right mortgage?

There are numerous lenders and mortgage products on the market. Finding the mortgage that suits your circumstances can be difficult. At Concept Funding, we work with you to help you realise your dream of buying your first home, provide you with a tailored finance solution for your needs, and guide you seamlessly throughout the loan process.

You share your situation and goals with us. We will find the loan products that is right for your goals and circumstances.

Remember, the interest rate should not be your main focus, we can quote you some low-interest rates options, but if you cannot get the right loan amount to buy your property or if that lender won’t approve your application, then there’s no point.

The best mortgage is the one that the lender approves for you to purchase your dream home.

You should not let the stress of owning a homestand get in the way of your dream house. If you prepare adequately, you will be on your way to financial freedom sooner.  Let Concept Funding help with all your mortgages, so you have one less thing to worry about.

Do you find buying a property stressful? Get this free tip on what to do to protect your mental health.