Buying a house is a big and exciting change. It is one of our major life events, up there with graduating from high school, getting married or having a child. It is also one of the most important purchases you will make.
There are a wide range of providers and loans across the market with a vast selection to choose from. Useful though it may be to have plenty of choice, it can leave you feeling confused. So, let us try and keep it simple for you.
You have a few things you need to ask yourself first of all.
What Type of Property?
Owner occupied to live in or Investment?
House, unit or townhouse?
Existing property or build a new house?
Generally speaking, the banks treat all of these about equal. But beware particularly small units, houses under powerlines, kit homes, income producing properties and other niche properties as they can have lending restrictions associated with them.
How much can I Borrow?
It is important to understand how much you can borrow. This varies with every lender due to their different policies. The amount you might be able to borrow today could be one figure, but with a bit of guidance you could tidy up your financials and borrow a whole lot more. The two biggest changes you can make are credit card limits and consolidation of other personal debts.
Have a look at our Borrowing Capacity calculator to get an idea.
How Much Can I Afford to Pay?
The combination of your savings, gifts, first home owners grant and a bank loan will ultimately determine the maximum amount you can afford to pay for a property.
As well as the house price itself you also need to add on the cost of stamp duty (if applicable), building or strata report, legal expenses, Government fees and potential bank charges.
If you want to understand what the figures look like jump over to our Property Buying and Stamp Duty calculators.
How much you can buy for and borrow is one thing, but consider how much you are comfortable repaying each week, fortnight or month. For some people this may mean some compromise on how much you spend, where you buy or even putting off a purchase until you have saved more.
First home buyer benefits are available, and the vary state-by-state. Currently, these take the form of either cash grants, stamp duty exemptions of a combination of the two. There has been much political discussion around housing affordability but there has been little change in the last 10 years.
The government has a website (http://www.firsthome.gov.au) which provides the link for your state or territory.
At Murray Home Loans we understand the differences and can quickly tell you what benefits you might be eligible for. If you are in any doubt or have any questions, please contact us and we can answer your queries.