First Home Buyer – Newcastle, Central Coast and Hunter Region
As a first home buyer, the buying process can be overwhelming, there are so many things to consider, have in place, organise and negotiate. The good news is you are not alone. At Mortgage Partners Australia we understand the entire process from beginning to end and we are here to help you each step of the way to achieve one of your biggest family and financial commitments.
The key to buying your home is being organised and obtaining the advice you need for you to be successful.
To help get you started we have pulled apart the basic steps of buying your first home and provided you with some of the detail to consider along the way.
Steps for a First Home Buyer
Understand your financial position
The absolute minimum is 5% of the purchase price, however in today’s market, the majority of lenders will want to see 10% deposit. The 5% will need to be considered ‘Genuine Savings’, that is held by you in your account for at least 3 months.
3. Buying Power
Quite different from your borrowing capacity, your Buying Power takes into account your complete financial situation and provides you with your maximum house price you can afford to buy. As a first home buyer, it’s important to know your numbers.
2. Borrowing Capacity
This refers to your ability to repay a loan for the purchase of your first home. The capacity to borrow will vary from lender to lender, however you should consider what is most comfortable for you and your circumstances. We help you work through the numbers to ensure you know what is possible and what is achievable for you.
4. Household budget
It’s fair to say most first home buyers have a household budget which is based on renting or living in shared accommodation. As part of understanding your Borrowing Capacity, you should also be considering the extra costs associated with home ownership. Demonstrating that we have considered this in your application as a first home buyer demonstrates to the lender you are well prepared for your first home.
As part of our service at Mortgage Partners Australia, we will provide a complete finance review
Understand what you are looking for
Set yourself clear guidelines – This is the fun part, you get to make a list of all the things you want your home to be. Ie how many bedrooms, bathrooms and living spaces, where to live and what amenities you want to be close too. Are you looking for a house, duplex or an apartment? Knowing what you are looking for will help you stay on track and looking for the property that matches your needs.
Know your market
Ask us about detailed market reports – With your wish list in hand, you can now start looking at what is available based on your Purchasing Power. This is an important decision time, do I need more money, do I alter my expectations or am I on target to get into the market right now. We will help you through the process with detailed reports covering off suburb detail, recent sales and on the market reports to help you get started. You will be a first home buyer with the power of knowledge and confidence.
To help you decide, we can provide you with Market research and data
We action the plan from step 1. – You are almost ready to hit the streets. Having a pre-approval ready is now considered a vital part of your home buying planning.
The two key reasons being,
- You can act quickly and with confidence knowing you have an approval in place, and
- Selling agents and sellers look favourably at buyers who are ready to make decisions and have the finance to back themselves.
Open House Inspections
1. What to look for
Unless you are in the building game or have close knowledgeable friends to help you out, knowing what to look for is often difficult. Take a breath, use our checklists to help you work through each property inspection, capture the detail you need so you know whether you need a second look.
First inspection is all about does this property fit my criteria, the second inspection is more about the condition and identifying any work that is required. If after your second inspection you are still interested, it will be time to make an offer subject to a qualified inspection.
2. Document each property
Use a checklist to capture the features and characteristics of each property, in most cases a tick and flick is all that is required to provide you with the detail you need. It’s also a good idea to take photo’s to help you recall each property.
3. Review and rate at the end of each day
After a day of looking through properties, it’s easy to lose track of which properties had what features etc. Using the inspection checklists and reviewing each day’s activity will help you to stay on top of all the detail and weed out the ones you do not like and compare the ones you do.
4. Talking with agents
You have limited access to agents at Open Home Inspections. Make the effort to introduce yourself and obtain their details. If the property is not quite what you are looking for, ask them if they have anything like x, y & z? Or ask if it’s OK to call them to discuss what you are looking for.
5. Know what to ask
Feel confident to ask questions about the property or the sellers. Often you can gain some insight to the motivation for the sale or find out more about the property. In particular an agent is required to disclose anything they know about the property, so by asking simple questions about something you do not understand or cannot see, you may gain more information to help you make important decisions.
We are available for Buyer support throughout the buying process
Make An Offer
1. How to Make an Offer
The business end of all your work so far. A good offer contains all the information a selling agent needs to convince their client to take your offer. Use our offer template to help you create attract offers which are clear and concise. At the very least you should include your offer price, conditions of offer, if any, expiration of the offer, indicate your financial readiness to purchase and your conveyancer/broker details.
2. Negotiate a fair price
There is a great saying in negotiation “It’s not important where you start, it’s important where you finish”. Negotiate a fair price. A fair price is based on what value the property represents to you and how much you are prepared to pay for it. If you under value a property compared to the market, either the seller will say no to your offer or another buyer will buy it at a higher price. By all means, increase your offer as part of your negotiations, however, do so on your terms and based on the value you place on the property. As a first home buyer use your preparation from the previous steps to guide you through the negotiations.
3. Set your limits
Most of the work is done for you here. Your Purchasing Power calculations go some way to ensuring you know your limits. That’s not to say you spend your limit on every property you offer on. Set yourself a limit on each property you offer on and use this as your guide during negotiations. Your hard limit is your Buying Power, never exceed this number, it will end in tears.
4. Arrange Pest and building inspections?
This is optional, though highly recommended. You arrange your inspections once you have your offer accepted by the seller or selling agent. The reports will help you decide if there are any changes to your offer and whether to proceed to contract. Unless you are an expert, most first home buyers take the stress and risk out of buying their first home by arranging to have these inspections done.
We will Provide Communication at every stage
Contracts and formal approval
Do you need help with conveyancing?
More often than not the answer is yes. Though most residential property transactions proceed to sale without a hitch, knowing what to look for, how to communicate with legal representatives and lenders is crucial to a successful purchase. Leave this to a professional. Have your conveyancer or solicitor review and advise you on the contract before signing, especially if the contract requires you to waive your rights to a cooling off period.
Ideally you will only sign and exchange contracts once you have a formal finance approval in place. Your conveyancer and broker will manage the process for you and let you know when it’s OK to exchange contracts.
1. Exchange contracts
Essentially this means you have signed the Contract of Sale and you have given your legal team the authority to exchange contracts with the seller or their legal representative. The exchange of contracts is the binding action between the two parties, subject to any conditions or cooling off periods.
2. Organise building insurance
Ask us about the Allianz special offer. – Once you sign a contract of sale and it’s ‘Exchanged” with the seller’s conveyancer/solicitor, you have a legal responsibility for the property and should insure yourself against any potential loss if something should happen to the property.
3. Loan Documentation
Arrange a suitable time to walk through the contract and signatures. – The loan contracts and mortgage documents are quite complex and can be confusing to review and complete. Ask us to help you through this process.
Congratulations – let’s focus on working to your goals. – Prior to settlement your conveyancer or solicitor will notify you when settlement is to take place and ask you to provide any additional money to complete the purchase. Once you have sufficient funds in place, you get to sit back relax and wait for the call to pick up the keys to your first home.
Post settlement reviews and support
Request a Call Back
Would you like to speak to one of our finance advisers over the phone? Just submit your details and we’ll be in touch shortly. You can also email us if you would prefer.
Mortgage Partners Australia is a professional organisation designed to provide our clients with the highest level of service and satisfaction.
IN FACT WE GUARANTEE IT.
Mortgage Broker Newcastle, Central Coast and Hunter Region