Are you ready to buy your first home?

Buying a house is likely to be the biggest investment you will ever make. There’s nothing quite like the thrill of owning your own place and knowing your days of rental inspections and leases are over.

Having a place to call your own doesn't have to stay a dream. We’ve put together 9 key questions to see if you’re ready to take the plunge.

1. Do you have a deposit or a guarantor?

Saving for a deposit can be tough. You need to stick to a budget and be willing to make sacrifices to get a lump sum together. If you don't have a deposit, you might be able to use a guarantor to secure your loan. This might be a family member, who can offer equity in their own property as a guarantee against your loan repayments.

A deposit, whether through savings or a guarantor, usually means you can avoid lenders mortgage insurance.

2. Are you entitled to a first home buyers grant?

If you’re buying your first home, you may be entitled to the Queensland First Home Buyers Grant.  Depending on the date of your contract, you’ll get $15,000 or $20,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000).

You must meet a range of conditions to be eligible for the first home buyers grant, including not owning property before, and agreeing you will live in the property for at least 6 months from settlement.

3. Do you understand the types of home loans?

There are different types of home loans to suit your situation. You can choose from variable interest rate loans, fixed rate loans or a line of credit loan.

It's a good idea to get across this type of information before you start looking at properties for sale. When you find a house you fall in love with, it can be tempting to make quick decisions, and your emotions may cloud your reasoning on the best financial choices for you and your family.

You can use the QBANK loan comparison calculator to check which type of loan will work for you.

4. Are you prepared for the other costs of buying a home apart from the purchase price?

Be prepared for other costs in the buying process including:

  • building and pest inspections
  • valuation fees
  • stamp duty (also called transfer duty)
  • lenders mortgage insurance (if you don't have a 20% deposit or guarantor)
  • conveyancing and solicitor fees
  • title registration and insurance
  • council land and water rates (from date of settlement)
  • moving expenses
  • costs to break a lease if you have a long-term rental property.

These type of expenses mean you’ll need access to more than just the deposit.

5. Have you done the 5-year test?

Buying a home is a long-term commitment. Take a look at your circumstances now and think about where you might be in 5 years. Will a home you can afford to buy now still suit you then? What if you start a family? Are you hoping to make a big career change or start your own business? Will the location still be suitable if you change jobs?

These are all things that may affect your decision on whether to buy now, what type of home you buy, and where.

6. Do you want to buy or build?

Buying a new or established home or building one yourself both have pros and cons.

Buying an existing home means a more established neighbourhood, mature trees and landscaping and more services and activities already around you. Your lead time to move in is also likely to be much shorter than waiting on construction to finish.

Building can mean lower prices and tax benefits. If you buy off the plan before construction starts, you might get a chance to personalise your home by choosing layouts and fittings. Newly built homes are also likely to be more energy efficient and come with construction warranties to cover any issues.

Remember, if you want to qualify for the Queensland First Home Buyers Grant your property needs to be a new construction.

7. Are you ready for your monthly repayments?

Do you know what your monthly repayments will be? You can calculate your payments using the QBANK loan payment calculator.

Now’s a good time to put together a comprehensive household budget including all of your monthly expenses. If you’re not sure if you’ll have enough to get by once your mortgage is paid, you might need to think about saving more or look at a less expensive property.

Are you in a stable and secure role where you know you can depend on your salary to make your mortgage repayments? Do your sums and be realistic about what you can afford.

8. Are you ready to become your own landlord?

Some people think they should buy a home because their rent is almost as high as a mortgage payment. If you’ve been renting, you might be surprised at the extra costs of owning your own home, including:

  • home maintenance costs. You become your own landlord when you buy a home – there’s no one else to call if the hot water system explodes or the oven stops working
  • land and water rates – usually billed quarterly by your local council
  • land and building insurance.

9. What’s your plan B?

Are you prepared if interest rates rise and your repayments increase? Depending on the type of home loan you have, (variable interest rate loans, fixed rate loans or a line of credit loan), changes to the interest rate can affect homeowners in different ways.

Before you decide to go ahead with your loan, look at some different scenarios to see how you would cope with an increased repayment. Are there other things in your budget you can cut back on? Depending on your circumstances, you might be better off with a less expensive property where you know you could cope with some changes to your repayment.

Reach out for some advice

Buying your first home is a big milestone. You will never forget the feeling of being handed the keys and opening the door to your very own house for the first time!

If you’re good to go and ready to buy your first home, or want to talk about your options, we’d love to help. Contact QBANK to talk about our award-winning home loans or call us on 13 77 28.

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First Home Buyer

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