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First Home Buyers Guide

Buying your first home is an exciting time, but it can also be confusing and stressful. From pre-loan homework to neighbourhood research and budgeting, there are lots of issues to research and plenty of boxes to tick. Whether you buy a small apartment in the inner-city or a large suburban house, purchasing a home involves a range of critical financial decisions.

With the following seven tips, you can get the finance you need and find the home of your dreams.

Get your finances in order

Before you start researching loans or locations, it's important to look honestly at your financial situation. Review your credit score, avoid late payments on existing debt, and aim for 6 months or more of good credit. You should avoid taking out new credit cards or loans during this period and deal with your finances by paying off your highest interest debts first.

Research upfront costs

The vast majority of people need a mortgage and deposit in order to purchase a home. While many lenders require a 20% deposit, you may be able to buy a home with as little as 5% or 10%. You need to be careful with low deposit loans, however, as they often involve higher interest or less flexible conditions. Along with a home loan deposit, there are other upfront costs first home buyers need to consider, including loan application fees, mortgage insurance, government charges, and legal expenses.

Consider ongoing costs

While property is a sound investment in most situations, purchasing a home can be expensive. Before you research properties or obtain finance, talk to a professional mortgage broker who can advise you on different loan types and explain recurring expenses. While loan repayments are the biggest costs associated with homeownership, you also need to consider interest charges, property taxes, council rates, home insurance, building inspections, moving costs, and renovation expenses.

Look into financial assistance

A trusted and experienced mortgage broker can advise whether you qualify for any financial assistance. There are government programs available for first home buyers in Queensland, as long as you're an Australian citizen or permanent resident. The Queensland First Home Owners’ Grant provides $15,000 towards buying or building a new apartment or house valued at less than $750,000. While there are some eligibility requirements, this grant can be a great step onto the property ladder. In addition, you may be able to access stamp duty concessions, the New Home Guarantee, and the First Home Super Saver Scheme (FHSSS). 

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Research locations

Once you have a chat with a mortgage broker and a good working budget based on projected costs, assistance programs, and income, you will have a realistic idea of what properties you can afford. Location is everything in the property market, so take a look around and research average prices in your chosen areas. When deciding on a location, it's important to have a basic understanding of market movements, neighbourhood trends, interest rates, and lifestyle factors.

Get pre-approval

Also known as a conditional approval, mortgage pre-approval provides you with a specified mortgage amount subject to finding a property. Before you start shopping around for the home of your dreams, it's a good idea to know exactly what you can afford. To get pre-approval, a mortgage broker will ask you to provide them your proof of income (usually the two most recent payslips), debts, employment records and living expenses. Your Pivotal Financial mortgage broker will take care of your pre-approval application from start to finish. While pre-approval is not a guarantee of loan approval, it's a great place to start so you know how much you can borrow. This gives you confidence to start making offers on properties.

Enlist the experts

This guide may seem simple, but things get confusing fast when you're in the property market pressure cooker. In order to make smart decisions based on accurate market data, you need to call in the experts. 

Buying a home is one of the biggest financial decisions you'll ever make, so it's vital to avoid mistakes.

If you're ready to talk to the experts and find the home of your dreams, Pivotal Financial is here to help. Get loan estimates with our calculators and call us at 07 3007 9088 for professional mortgage advice. You can also get in touch online.

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