Are you looking to purchase your first home? Or do you know someone who is looking to get into the property market?
Today I discuss 5 questions that First Home Buyers should ask themselves before they commit to purchasing their first home.
If you would prefer to read instead of watching the video, scroll down to see a transcript.
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Transcript
Hello, Brendan from Buyers Choice, your home financing specialist.
Out enjoying this beautiful weather we’re having again in South East Queensland.
Today, I thought I’d take the opportunity to talk to you about five questions that first home buyers should be asking themselves before they take out a home loan.
Question 1
So straight off the cap, number one, is it the right time? We’re always worried about missing out on things.
You see it in the media, they’re talking about housing markets going up, it’s getting more expensive for first home buyers to get in. So the desire is to move now and not to wait too long before buying your first home.
- You need to ask yourself, is now the right time?
- Are you better off waiting another six months, 12 months?
- Is renting a better option for you than going down the path of home ownership?
I know the great Australian dream is to own your own home, but it may not be the best answer for yourself.
Question 2
How much money do I need?
So purchasing a new property, you’ve gotta put down some of your own hard earned dollars, there’s no two ways about it.
- So how much do you need to have saved?
- How much have you got saved?
- Are you going to put down 20% and avoid Lenders Mortgage Insurance?
- Are you gonna go to a lender who will let you borrow the maximum amount and, as a result, charge you Lenders Mortgage Insurance to do it?
Most likely, a higher interest rate as well, but go down a path which will allow you to buy a place with the least amount of money. You need to have the answer to that question before you proceed.
Question 3
You should be asking yourself is, can I afford the repayments?
And it’s not as simple as, I’m earning X amount of dollars, the repayments are Y, yep, I can afford them.
- Is it gonna affect your lifestyle?
- Are you going to have to give up things to be able to afford to move into your new home?
The answer is not yes or no, because you might have to give up things to get in there, but your desire to get into a new property is bigger or more important than what you’ve gotta give up.
You need to understand what the costs are, whether you can afford them, and do you need to make some sacrifices to be able to afford it? And then make an informed decision.
Question 4
You should be asking is there any government grants that I can access?
A lot of the states have a The First Home Owners Grant, need to understand what’s available, what are the conditions?
- Is it only for a construction?
- Can you get it on an existing property?
- What are the catches?
- What does the government need to you to do?
- Do you need to live in the place within 12 months?
- What are the rules around the grant?
You need to look at that, understand it, and it forms part of your decision-making process.
Having asked yourself those first four questions, you understand whether it’s the right time, how much money you need, how much money you can borrow, whether you can afford the repayments, and what support’s out there from the government.
Question 5
The final question, knowing all that, is, are you, yourself, ready?
Do you want to make that commitment?
Because it is a big commitment. It is something that you have to be ready, not just financially, but mentally, to go ahead with. I can remember myself, nigh on 20 years ago, when I bought my first property. I went from having minimal debt one day to owing $300,000 the next.
As a young guy in his late 20s, mid-20s, something in my 20s, that’s for certain, it’s a big commitment. Having that type of debt, can you sleep okay at night, knowing that you owe someone all this money, and it’s going take you the next 30 years, most likely, to pay it off?
That is a decision that only you can make. No one else can make that decision for you.
So work through these five questions.
- Is it the right time?
- How much money do I need?
- Can I afford the repayments?
- Are there any grants available?
- And the big one, am I ready to proceed?
Before you get too far along.
If you like this video and like this type of content I’m putting out, please hit like down below. Leave a comment, tell me whether you agree with this, whether there’s another question you should be asking yourself.
Let me know what you’d love to hear.
Brendan from Buyers Choice, I’m going to continue enjoying this beautiful weather, and talk to you next time.