Newspaper article The Daily Mercury (Mackay, Australia)

Prepare and Plan before Buying Home

Newspaper article The Daily Mercury (Mackay, Australia)

Prepare and Plan before Buying Home

Article excerpt

BUYING your first home is both exciting and nerve-wracking. It is a major decision that takes planning and research, and careful budgeting. Here are some tips to get started.

You are ready to become a homeowner if you have the following things in place:

A substantial deposit - The bigger the better when you're saving for a home. (As a rough guide, aim to save 20% of the purchase price plus enough to cover costs.)

A regular savings habit - A solid track record of employment and a history of regular savings in your bank account will make it easier for you to get a home loan.

Pre-approval for a loan - Compare a few different loans before you decide. Ask your lender for a key facts sheet on each home loan so you can compare more easily. Once you pick the loan you'll know what the repayments will be and how much you can afford to spend on a property.

Some additional savings - These will act as a buffer if interest rates rise and your repayments increase.

Government assistance is available for eligible first home buyers (not investors). See if a first home saver account is for you, and visit the First Home Owner Grant website.

How much can you afford?

A good way to find out how much you can afford to spend on a property is to review your household budget. If you don't already have one, use our budget planner.

Take what you've saved as a deposit, add in first home buyer assistance (if applicable), then work out how much you can afford to borrow

Work out how much you can comfortably afford to repay on a home loan each month, and add a bit more to act as a buffer in case of interest rate rises

Include all the costs that come with home ownership - up-front costs like stamp duty and legal fees, ongoing costs like land and water rates, house and contents insurance, and repairs

One of the bigger upfront costs you may have to pay is stamp duty or transfer duty on your property. …

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