Tips for First-Time Home Buyers

Buying a home is one of the most significant decisions a person will deal with within his lifetime. Considering the amount involved in this endeavour, first-time home buyers also have a huge responsibility. Many are left wondering how to buy a house for the first time and have a great experience out of it.


Many people rush into buying a home because it is viewed as a symbol of financial stability and adulthood. However, it should also remind you of the big commitment you have to tackle when you pursue home buying. It is not guaranteed to be a good investment, and there will be a truckload of work that you need to do. Even then, you have to realize that owning a home is far from the creative remodelling shows that you watch on TV.


More so, homeownership is a long-term responsibility in terms of finances. Many people have homes, but their finances are in bad shape. You have to know what you are getting into when you decide to buy a home. To further help you navigate the challenging path of home buying and ownership, we’ve prepared a few tips for first time home buyers like you.


Save Up With  A Budget in Mind


budget to buy a house


In any situation, saving can be a challenge. It is difficult, especially with all other expenses coming about. If you are going to buy your first home, you have to keep a budget in mind and stick to it. Banks will consider you the right candidate with decent savings if you apply for financing for your home.  Lenders often look into savings from the past three to six months as evidence of your capability to pay. It will be a crucial tool for you when you start seeking financing options.


To help you save, you have to set a budget for yourself and your savings. Your efforts in saving money will be more cemented if you have a definite boundary for your spending. Without a budget set, you will struggle to reach your goals. Write down your goals, budget, and expenses.  You may also use budgeting apps to help you manage your finances and give you an overview of where your money is going and how much you can save realistically.


Prepare for Extra Costs


Always have some extra budget when you plan to buy a home. There will be unexpected fees and other expenses that you might spend on paperwork and documents. Check for assistance from the government, especially in your locality, if they have offers for first time home buyers. In 2000, the government offered the First Home Owner Grant to offset the effects of GST on buying a home. If you are eligible for all the criteria to receive this one-time grant, it will significantly help your finances. The amount granted varies from one state to another.


But don’t let this make you lazy in your savings. Utilize the grant to have some extra in your deposit so you’ll have a lower monthly mortgage to pay in the future.


Get Pre-Approved for Financing


The process of finding a lender and a mortgage plan is one of the main challenges that first time home buyers experience next to finances. It is also difficult to say how much you can afford to borrow. Thus, you should talk to experts about this phase. It might be a good idea to ask for advice from friends and relatives you trust. Likewise, you should start preparing documents for pre-approval.  


This process may ask for verification of your income, such as payslips, certificates of employment, and compensations. You should also provide your statement of debts and, if possible, a good credit rating from the credit reporting agencies. You must also provide copies of your ID, such as your driving licence or your company ID. Additionally, you should also include copies of your first homeowner grant and your bank statements as proof that you have money to pay for the security deposit.   


You may still get approved for a mortgage loan even if you don’t have enough money for the security deposit or down payment. If you are eligible for the other requirements, you can get a low deposit scheme. Still, you will have a more extended repayment period.


Check the Market for Homes

house market


After getting pre-approved for a mortgage loan, you are ready to head out and buy your first home. But wait, bidding for the excellent price of your dream home is not a walk in the park. Make sure to do some research first to help you get the ropes to haggle with property brokers or owners.


Read property sections of the newspapers or browse online property sites to see what’s available and get a clear picture of the price range. If you intend to buy a house in a highly-urbanized area, expect to pay a property premium. Focus on your needs and your budget. There is no point in pursuing a massive home in a perfect location if it's far out from your price range—zero in on suburb properties that are appealing in all aspects and list them down.


Come Up With a Decision


After listing down your prospects from the online property sites and newspapers, it is time to visit them for open inspections. It is the best way to gather more information about the property and the location. Ideally, you can set up a private assessment with an agent or the property owner. This way, there will be no other people walking around, and you will have a better feel of the house.   


Ideally, it should tick off most of your needs for a home. You may also want to check out properties in locations you never considered at first. You may find your dream home near the beach or in another city.  Finally, don’t be disgruntled if you haven’t found the perfect house on the first try. Refine your checklist to include other housing options like condos or flats for sale. Some homes may also need some renovation works, but they can be way below your budget, too - consider them too.


Wrap Up


The question of how to buy a house for the first time should be approached carefully but decisively. There are challenges that first time home buyers need to face to finally move into the perfect place. Primarily, there is a budget and finances to consider. Know your limits and struggle to achieve your saving goals.  Always be realistic in your finances and avoid pursuing properties that you cannot afford. If you don’t close the deal on a property you like, move on and find another one. There are plenty of opportunities for you to explore. Be patient and never rush in making a decision when buying your first home.