Are you looking to take the step towards home-ownership and don’t know where to start? We’ve got a step-by-step guide on all things you need consider and all you need to know before making this dream a reality.
1. DETERMINE TYPE OF HOUSE (TO LIVE IN/INVESTMENT)
This step will influence each of the following steps as the type of house may vary completely depending on what you decide. In your head you may want to build a dream home in your dream location, however is this a viable option? Many first home buyers looking to get into the market would like to live closer to town, however due to the cost and scarcity of land in these locations, it may be impossible to afford. The truth is there is no best answer and every individual/couples situation is different. Things you’ll need to factor between deciding to buy established or new and living in the home or rent it out (commonly referred to as “Reinvesting”)
- Affordability (how much you can borrow given the type of purchase)
- Work-life balance (how close to work, friends, schools, family, sport – time commuting)
- House Design (Building a home to suit your life vs. buying an established house which may not contain all the things you desire)
- Age of the property (established homes
- Timing (Purchasing existing you may be able to move in as little as 30 days depending on settlement times vs. purchasing new which can take around a year after things like land title delays, pre-site, colour/electrical selections, permits, build time)
- Depreciation (For tax purposes new homes depreciate at a much higher rate than established homes. However, this should not be the deciding factor when choosing an investment. Speak to someone who specializes in this for further information)
2. BORROWING CAPACITY
First things first, you’ll need to be aware of your borrowing capacity. There are many factors which affect your borrowing capacity such as:
- Current Income Levels
- Recent spending habits
- Credit History
Banks/lending institutions are necessary for most first home purchasers as very few first home builders have enough savings to purchase a home outright. Financial institutions are more than willing to lend to individuals/couples with the right amount of security and the ability to service the loan. You would have seen much recent media coverage regarding interest rates being at record lows, it’s true! There’s never been a time in the past with interest rates this low
To work out your borrowing capacity we’d suggest contacting a mortgage broker rather than contacting your bank. The reason we suggest this is a good mortgage broker will be able to shop your situation around to many banks/lenders to enable you to either borrow more or get a better interest rate. This can not only enable you to purchase your dream home, but save you thousands of dollars each year. Here’s a broker you can call for a free assessment:
Ultimate Finance Group. Phone: 1300 307 933 Email: firstname.lastname@example.org
3. ELIGIBILITY FOR FIRST HOMEOWNER CONCESSIONS
It’s worth checking your eligibility for any government assistance that you may be eligible for as a first home buyer. As of the time of writing, first home buyers are eligible for a $10,000 first home owner grant for properties up to $750,000. This doubles to $20,000 for new homes built in Regional Victoria. Details on further eligibility can be found at this site: https://www.sro.vic.gov.au/fhogapply
The Victorian Government also has what is called a “Homesvic Shared Equity Initiative”. This allows eligible recipients to purchase a property with a 5% deposit. Under this arrangement, the government owns part of the home until their loan is paid off at a given time in future. It’s worth checking the website to see if this may benefit you: https://www.vic.gov.au/homesvic-shared-equity-initiative
4. CHOOSING YOUR AREA
Now that you have your finance up to date, it’s time for the big decision, deciding on your property. Depending on whether it’s for investment purposes or for you to live in will determine where you look to buy. If you’re looking for an established property sites such as Realestate.com and Domain.com have pretty much all on market properties listed. It’s worth going through recent sales in the area, attending auction and doing your market research before looking to buy. Speak to local real estate agents and local experts to get as much information as possible. If you are looking at building a home in a newer estate, go out and visit a land sales office or simply type “Land” followed by the suburb (eg. “Land Clyde North”, “Land Wallan”) in a search engine to see estates with land for sale appear. If you are feeling overwhelmed, most builders have relationships with these developers and can give advice on which lots are preferable to build on as site selection and the amount of fall on a lot can drastically change the estimated site costs on a build. If you are looking for a builder who can provide fixed site costs, house and land packages or simply give you a free quote on your estimated site costs call Kingsbridge Homes on 1800 897 876.
5. CHOOSING YOUR HOME
Choosing your home can be the most daunting part of the overall process. We understand how many home buyer advertisements are on TV, Radio, Internet, Billboards and how hard it is to compare builders as they all have different house designs and promise a world of extras to try and sell homes. Your best bet is to visit a display village near you to get an idea of what features/designs you like in a house. Some builders are more flexible than others in terms of letting you amend their designs with some builders not allowing any changes. Many display homes have upgraded features (i.e. Pendant Lights, Downlights, Upgraded Carpet, Stone Benchtops, upgraded Tapware, the list goes on.) it’s really important when comparing homes to read through all your inclusions so you know what to expect when the home is built. Comparing builders is another difficult task, on way to do this is by visiting ProductReview.com.au as it has most registered builders on there so you can read about previous customers experiences with each company. If you know someone that’s built a home recently also, you may want to discuss with them about their experience. Kingsbridge Homes strives to provide the best customer service you could hope for whilst going through this delicate process. We can adjust our standard floor plans to make them suit your needs. If you’d like to reach out to us for a no obligation chat/quote, feel free to call us on 1800 897 876 or email at email@example.com.
Visit our other Blog Pages for details regarding the process of getting your job to site and constructing your home.