Buying your first home is a huge, exciting, and often daunting experience. Here are five important questions to ask yourself before you start the house hunting process.
1. What home and area will best suit my needs? Having a clear idea of what and where you want to buy is an essential first step. Are you looking for a family home with enough bedrooms to accommodate in-laws or more kids down the track? Perhaps you love the idea of buying a budget ‘fixer-upper’ and transforming it into your dream home. Or do you want a modern townhouse or condo that is ready for you to move in? It’s also important to think about where you want to live. Draw up a list of what is important to you – i.e. schools, amenities, parks, public transport, a friendly community or accessibility to your workplace – and hone in on areas that fit your criteria.
2. What features am I looking for in a home? Your first property is probably the biggest purchase you’ll ever make, so it’s important that you hold out for a place that is right for you. You can divide your list into ‘must-haves’ and ‘nice-to-haves’ but don’t leave anything off. Think again about basic wants, such as how big and modern your home must be, as well as smaller details like garage space, living room layout and kitchen appliances.
3. How much can I borrow? Before you hit the auctions and home inspections, it’s essential that you know how much you can actually spend. Visit a few lenders to get an idea of how much you can borrow. There are a number of different loans – including federally-backed programs – designed for first-time homebuyers and those who don't have the standard 20% minimum down payment. Shop around for the best mortgage interest rate, as this will make a big difference in how much you actually pay. Also realistically assess what you can afford in monthly repayments, and don’t be tempted to over-extend yourself for your dream home.
4. What are the other costs? As well as thinking about your monthly repayments, consider what you can afford for a down payment, the cost of insurance and property taxes, your closing costs, and how much you will need to spend on renovation and maintenance.
5. Who can help me find and purchase a home? A good, ethical real estate agent can be your best friend during the home hunting process. These are the professionals who know first when a home hits the market, and who will find those that match your criteria. You should also search through online listings, look out for sale signs in the neighborhoods you want to live in, and ask friends, family and colleagues to keep an eye out. When you’re ready to buy, an estate agent can guide you through the purchase process – from getting a loan to negotiating a contract.