Deciding to enter the Australian property market is a huge decision, so it is vital to make sure you are financially ready to take the plunge. Proving that you can make the required repayments — to both the bank and to yourself — is a necessary hurdle to make the transition to first homebuyer as seamless as possible. Here are the first five steps you should take when the time comes to buy your first home.
1. Make saving a habit
Having a regular savings plan will make it easier to get a home loan. Banks need you to prove to them that you are responsible when it comes to saving and spending your money considerately. To be honest, you may also need to convince yourself you are ready, and setting a savings goal could be a good test to prove that you can do this. Start by getting yourself a high-interest savings account and setting up a recurring deposit each pay cycle. Making saving a regular habit will tell a bank that you are ready to make a move and become a first homeowner.
2. Budget wisely
Not sure where you should start? Trawl through your bank account statements and begin by keeping track of your current expenses and when you pay them. Next, play around with interest rates on our calculators to get yourself more familiar with what your home loan repayments could look like. Your budget should not only reflect upfront costs like your initial deposit and future loan repayments, but also one-off expenses like stamp duty, legal fees, moving costs, and furniture, as well as ongoing utility bills and council rates. Remember, a bigger deposit means a smaller mortgage, so look at your expenses in fine detail and try to find a way to go without some luxuries in life. You could be amazed by how much you save just by cutting back on frivolities and irresponsible credit card use.
3. Know your borrowing capacity
Once you have prioritised your spending and start to see the savings grow, you will be in a better position to set up a meeting with your bank to discuss loan structure options and your borrowing capacity. Your bank or lending provider will give you an indication of the amount of money you can borrow and will help guide you with how much more you need to save to be able to afford your first home. Once you have this information, the fun part begins – the search for your new home.
4. Find a home you can afford
Evaluate what features you want most in your home, as well as the type of neighbourhood you want to live in. Depending on where in Australia you are looking to buy, you may be eligible for further stamp duty savings. Be sure to do some research as to what your entitlements are when purchasing a new home or vacant block of land — our New Home Advisors can be a great help when it comes to this. Also, you may want to get familiar with HomeSolution by Metricon, our home and land options made especially for first home buyers.
5. Apply for the First Home Owner Grant
In a competitive property market, many Australian first-home buyers wonder how they will ever get their foot in the door. If that’s the case for you, you may be comforted to find yourself eligible for the First Home Owner Grant, a one-off grant to support your entry into the market. The amount varies depending on your state or territory, but you can find out more on our first home buyer resources page.
At Metricon, we're here to guide you through the building process, so if you have any questions about homeownership, don’t be afraid to speak to us today.
