Understanding Your Financial Position Before You Start
Before you begin your property search, it's crucial to understand your borrowing capacity and financial situation. This means reviewing your bank statements, calculating your income, and determining how much you can realistically afford for a home loan. Getting pre-approved for a home loan provides clarity on your loan amount and strengthens your position when making offers.
Working with a mortgage broker who has access to banks and lenders nationwide can help you explore various first time home buyer programs and packages available. This includes understanding the Home Guarantee Scheme, which can help eligible buyers purchase property with a smaller deposit, potentially avoiding lenders mortgage insurance (LMI).
Research Available Government Support and Incentives
First home buyers in Victoria have access to several benefits that can reduce the cost of buying a home. The First Home Owner Grant (FHOG) provides financial assistance for eligible buyers purchasing new homes. Additionally, stamp duty concessions or exemptions may apply depending on the property value and your circumstances.
Understanding these first time home buyer schemes is essential as they can significantly impact your overall budget and loan to value ratio (LVR). Your mortgage broker can help identify which programs you're eligible for and how to incorporate them into your property hunting strategy.
Setting Your Property Search Parameters
Once you understand your budget and available government support, establish clear parameters for your property search:
• Location preferences: Consider proximity to work, transport, and amenities in Preston and surrounding areas
• Property type: Determine whether apartments, townhouses, or houses align with your budget and lifestyle
• Essential features: List must-have features versus nice-to-have elements
• Future growth potential: Research the property market trends in your target areas
Remember that your first home doesn't need to be your forever home. Focus on properties that meet your current needs while offering potential for capital growth.
Timing Your Property Inspections and Research
Effective property hunting requires strategic timing and thorough research. Attend open inspections during different times and days to understand the neighbourhood dynamics. Visit properties multiple times if possible, including evening and weekend inspections to assess noise levels, parking availability, and local activity.
Research recent sales data for comparable properties to understand market values. This information helps you make informed offers and avoid overpaying. Consider engaging a buyer's advocate or building inspector for properties you're seriously considering, especially if you're looking at older properties that may require renovations.
Understanding Different Home Loan Options
As you identify potential properties, understanding your home loan options becomes increasingly important. Variable interest rates offer flexibility and potential benefits when rates decrease, while fixed interest rates provide certainty with repayments over a set period.
Consider features like offset accounts, which can help reduce the interest paid on your home loan by offsetting your savings balance against your loan amount. Some lenders offer interest rate discounts for first home buyers or specific professional groups, which can result in significant savings over the loan term.
Making Strategic Offers and Managing the Application Process
When you find a suitable property, having your finances organised streamlines the application process. Pre-approval demonstrates to vendors that you're a serious buyer and can proceed quickly once your offer is accepted.
Your mortgage broker's access to Home Loan options from banks and lenders across Australia means they can help secure competitive rates and suitable loan products. They can also assist with the investment loan application process if you're considering purchasing your first investment property alongside or instead of an owner-occupied home.
Preparing for Settlement and Beyond
Once your offer is accepted, the formal home loan application process begins. This involves providing detailed documentation, including updated bank statements and employment verification. Your broker will guide you through each step and liaise with lenders to ensure smooth processing.
Consider your long-term financial goals when finalising your loan structure. If you're planning to purchase investment properties in the future, discuss how your current loan structure might impact future borrowing capacity for investment loan options.
Successful property hunting combines thorough preparation, strategic research, and professional guidance. By understanding your financial position, utilising available government incentives, and working with experienced professionals who understand the local Preston market, you can make informed decisions when buying your first home.
Call one of our team or book an appointment at a time that works for you to discuss your property hunting strategy and explore the home loan options available for your situation.