Questions first-time buyers should ask themselves before a home purchase
While many potential homeowner’s dream home ownerships took a beating because of the rising property cost, most are still keen on buying a house if they can.
A home purchase is still part of many Aussie’s life plans and with good reason. Home ownership will generally be part of an individuals’ long-term financial strategies, and it plays a vital role in enhancing the health of our economy while providing a much-needed space for growing families.
Of course, home ownership won’t be for everyone. It’s a significant, long-term commitment that needs strong financial standing as well as right timing.
Now here’s what first-time home buyers should ask themselves before considering a home purchase:
What’re my reasons for buying a home? Figuring out why you want a home is important before you start looking at options. What’s your purpose? What do you want with it? Do you want to live in it? Are you going to rent it? Understand your motivations. Knowing the answers to those questions will define what kind of loan type you’ll need and what size house makes the most sense considering your short- and long-term family plans.
What can I afford? Before considering whether you need a two- or three-bedroom, you must define what you can reasonably afford. That means doing an inventory of your income, expenses, savings, assets, and debts. After knowing where you stand, consult a financial advisor and talk about your cash flow on a monthly and quarterly basis. Is it sensible for you to buy a $700,000 home or a $300,000 home?
The last thing you want is to fall in love with the “perfect” home only to learn later that it’s outside your price range.
What loan types do I qualify for? Like requesting for a credit card, whether you are eligible for a certain premium variable home loan depends on your financial history. Lenders will examine at your pay stubs, employment forms, tax returns and credit score to determine your eligibility. If you can’t offer a 20% down, think through whether you can afford a house now. Most collapsed mortgages and a majority of the defaults were homes that were acquired with very little money down. The more you can afford for down payment, the better because it will decrease your repayments.
What is my overall financial health? Another vital consideration to consider is whether you can stay on top of all your other financial life commitments without going under. You don’t want to sacrifice your retirement simply because you want to get a home right now. You must not put yourself in a condition where you’re struggling to pay off your credit cards or car loan. Make sure you can manage all of your finances when you step into a major choice like this.
If you value flexibility in payment and a plethora of bonuses that other loan types don’t have, then the some of the valuable home loan is the right fit for you. To give you an idea about the features that give you loads of repayment flexibility, here’s what you generally get:
- Split your loan with other Newcastle Permanent loans
- Everyday account with 100% offset available
- Make additional repayments and redraws at any time
- No establishment fees
- No ongoing fees
- Borrow up to 95% of the property value
- Competitive variable interest rate
Lastly, don’t be afraid to consult a realtor to help out during your home buying journey. Best of luck!