- Getting your finances in order is the first step to turning your homeownership dreams into reality. Start by saving for your deposit and other costs, and consider setting up a dedicated savings account to watch your home fund grow. Keep a close eye on your living expenses and budget wisely to ensure you’re on track.
- While interest rates matter, don’t overlook the Annual Percentage Rate (APR) for a more accurate loan cost. Explore different home loan types, compare interest rates, and factor in loan terms. Be aware of extra costs like Lenders Mortgage Insurance (LMI) and Stamp Duty, but remember that first home buyer grants can help ease the financial burden.
- Take advantage of government grants available to first-time home buyers. Beyond the popular first home owner grant (FHOG), research other grants and concessions tailored to your needs. Stay informed about updates in these grants, as they can significantly impact your affordability and help you step onto the property ladder with confidence.
We understand that embarking on the journey of buying or building your first home can be both exciting and overwhelming. But don’t worry, we’ve got you covered with this easy-to-follow first home buyer checklist. 🏠👏 In just 10 simple steps, we’ll guide you through the process of figuring out your finances, finding your own home and everything in between. So, sit back, relax, and get ready to take the first step towards owning your own home with confidence and clarity!
Let’s do this!
Sorting out your money.💸
To make your dream of building your first home a reality, you’ll need to start by saving for your deposit. Creating a budget, start tracking your expenses. We know that setting aside money for your deposit, stamp duty, and other costs is essential when exploring the option of building or buying your first home!
Saving consistently is key, and we’ve got two tips to help you maximise your savings and get a decent deposit down as quickly as possible.
Set up a dedicated savings account:
If you’re looking to build, a dedicated savings account can be a great way to grow your home loan deposit. Rather than just throwing your money into a mixed-use account, consider setting up a separate savings account for your home fund. Many banks offer long-term savings accounts with higher interest rates, which can help you reach your savings goals (and deposit) faster. This will also make it a lot easier to track your progress and stay disciplined with your savings (it will also hint to the banks that you are sensible, and will have no problem making loan repayments). 👏🥳
We recommend chatting with your bank and seeing what options they have available; they may even have an offering with a better interest rate that you can take advantage of.
But just how much should you be saving per week for your home deposit?
A great rule of thumb is to put aside 20% of your earnings towards your savings account, and watch your savings grow! You don’t need a huge deposit for your first home if you are taking advantage of the government schemes, but having great savings habits will help with paying off those mortgage repayments.
Keep track of your living expenses and budget accordingly
To keep your finances in check, it’s important to know your living expenses and budget accordingly. Start by listing all of your fixed expenses such as rent, insurance, and internet. Next, estimate variable expenses like groceries and fuel. Don’t forget to include discretionary spending, such as Uber Eats and clothing, and plan for irregular expenses like medical bills and vet bills. Once you have a complete list of expenses, calculate the total living expenses, and compare it to your income.
If your remaining cash after expenses doesn’t leave you with at least 20% of your total income, consider reducing your expenses. You could use a finance tracking app like Frollo to help you track expenses and identify where you are spending more than expected.
If you are new to budgeting, download our free budget template to get started!
Do your homework on home loans. 📖
Choosing the right home loan can be daunting, but with a bit of research, you can make an informed decision and potentially save yourself some money. When researching home loans we know the first thing that people look at are the interest rates, while these are super important you will also need to pay attention to the Annual Percentage Rate (APR) which includes all fees and charges associated with the loan, so you get a more accurate understanding of the total cost of the loan. 🔍
To make the best decision for you, you’ll need to consider several factors. Start by understanding the different types of home loans available to you. Next, you’ll want to compare interest rates to find the most affordable option. Don’t forget to factor in the loan term, which can affect your repayments over time. It’s also important to consider additional costs such as Lenders Mortgage Insurance (LMI) and Stamp Duty – though it is worth knowing that with certain government grants, eligible first home buyers might be able to avoid these all together with a first home owner grant. A mortgage calculator can also be a useful tool to help you determine what you can afford and how much you’ll need to borrow.
Keep these factors in mind to find the best first homeowners loan option for building your own home.
Learn about government grants. 💰
As you’re building your first home, you should take advantage of one of the many home owner grants available to you. It will make the whole process easier on your finances.
While the first home owner grant (FHOG) is the most well-known, it’s important to research other grants and concessions that may better suit your specific needs. These could include grants for building new homes or concessions on stamp duty. Researching and factoring these opportunities into your overall home-buying strategy can help make your dream of owning a home more affordable.
2023 First home guarantee updates
If you haven’t heard the news, a recent update to the first home owner guarantee gives more people access, especially important if you are a non-citizen as now you can access several grants if you are a permanent resident.
Chat with a mortgage broker. 💬
Now that you know more about home loans, it’s time to talk to a mortgage broker. Mortgage brokers are experts in home loans and can help you figure out how much you can borrow based on your income, savings, and credit history. While you should also talk to your existing bank about a home loan, the benefit of talking to a mortgage broker is that mortgage brokers can get you access to a huge range of lenders, some of which you may not have had access to for one reason or another. They’ll also assist you in further comparing different loan products, so you can find the best option for your needs. 🤑
When should you talk to a mortgage broker?
You should consider talking to a mortgage broker as early in the home buying process as possible, ideally before you start house hunting. Why? Because a mortgage broker can provide you with valuable information about your borrowing capacity and the different types of loans available, the value of which can help you set a realistic budget for your home purchase.
By talking to a mortgage broker early on, you can:
- Understand your borrowing capacity.
- Getting pre-approved for a loan.
- Exploring different loan options.
- Lock in a favourable interest rate.
Secure pre-approval for your home loan. ✔️
Now that you have all the necessary information about government incentives and home loans, it’s time to take the next step towards your dream of owning your own home, it’s time to reach out to your own lender, bank or mortgage broker for pre-approval.
Obtaining pre-approval for your home loan is an essential step before making an offer on a property.
Pre-approval provides you with:
- Your borrowing power, with a clear spending limit and understanding of your repayments.
- The ability to narrow your home search by removing homes outside of your budget.
- A competitive advantage, by allowing you to move faster on your offer.
- Peace of mind when bidding on a home that you know you can afford.
Check out recently sold land. 📱
To get a feel for the market and a better understanding of residential property and values in your desired area, research recently sold homes. This will provide valuable insights into what you can expect to pay and help you refine your budget.
- Establish the suburbs you would like to live in
- Search online listings for houses currently listed in that area
- Review sold property prices in that area
Bonus tip: Explore house and land packages
For first-time home buyers, House and land packages in Perth can be an attractive and cost-effective option. These packages bundle together the land and the construction of a new home, simplifying the home-buying process. Be sure to research reputable builders in the Perth area, like Easystart Homes, to find the right package for your needs.
Start your house hunt. 🔍
Now that you have a clearer picture of your financial situation and what you’re looking for, it’s time to start searching for your own home and talking to a real estate agent.
If you plan to build
That’s a wrap!
There you have it! With our First home-buying checklist, you’ll be well-equipped to navigate the entire process, from saving and organising your finances to moving into your own home.
If you want to know more about the home building process, at Easystart Homes, we help hundreds of home buyers get into the Perth real estate market with affordable home designs and land options. We’re dedicated to supporting you every step of the way on your home ownership journey, providing reliable information and expert guidance to help you achieve your homeownership goals. Let’s make your dream a reality!