If you’ve been saving up to buy your own home, you’ll know that it can be a challenging process.
There are sacrifices that you’ll need to make and you’ll have to keep a positive attitude along the way. That’s because entering the property market isn’t easy – you’re up against strong competition from other buyers and rising prices.
Here are our insider tips and tricks for how to purchase your own home:
Research and utilize the grants you’re entitled to
As a first-time buyer, you’re entitled to the Australian government’s First Home Owner Grant, a scheme set up to support new homeowners. Generally speaking, in Victoria, if your new home is valued up to $750,000, you can receive $10,000 ($20,000 if you’re in a regional area). You can apply for the First Home Owner Grant at the same time you’re applying for your home loan.
There are savings to be made on stamp duty as well. Victorian first-time home buyers can receive a concession on stamp duty if your home is valued at less than $600,000 (if it’s more than this but still under $750,000, you can still receive a slight reduction).
Be realistic about the financial undertaking
There are many costs involved in buying a home, such as stamp duty and inspection reports to name just a few, so don’t fixate only on the property’s sale price. Come up with a budget and do your research so you can factor in what you’ll need to spend on. Make sure you also have a little bit of money left over, which you can draw upon should unexpected expenses pop up (such as having to pay more for renovations, etc.).
Ask for help with saving the deposit
It can be a long and hard slog even just getting together a deposit. You can quicken this process by asking for monetary gifts instead of physical presents for special occasions. Asking for money for your birthday and Christmas presents can help your loved ones support you in reaching your goal. While this request can seem direct, your family members might be relieved that they know exactly what you want. If you have other big events coming up, such as a wedding, consider asking guests for a monetary gift instead of arranging for a registry.
You could also consider having a family member go guarantor. A guarantor is someone who agrees to vouch for your ability to repay your loan. They are often a close family member, usually your mother or father, but in special circumstances, a sibling or a grandparent might be allowed to act in this role. The guarantor carries a great responsibility, as the equity of their property is used as additional security for your loan. By having them onboard, you are much more likely as a first-time buyer to be approved due to the gravitas a guarantor brings.
Be willing to compromise
Finances are one thing to consider – but the property search itself is another.
Compromise is a word you’ll hear a lot when you start hunting for a property. Being willing to compromise on your dream property means you may be able to buy earlier and spend less time looking. And there’s an opportunity cost in doing this.
You may have your heart set on a house but find you can only afford a unit or townhouse in the same area. Perhaps you wanted a particular suburb but find prices have shot up, so you need to look further afield. And you may need to accept that you will have to make improvements over time or do some renovations to create the perfect home.
Or maybe it’s a matter of being realistic and knowing that your dream property – the one that ticks every single box – just isn’t out there. Buyers at every price point have to compromise on something.
The sooner you can work out which property compromises you are willing to make, and which you are not, the sooner you will get on the property ladder.