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December 14, 2021

What You Should Know About Buying Your First Home

Buying your first home? Owned a home before and looking for a refresher course? Either way, STARK Finance is here to offer you some great Australia home buying tips. When you are buying your first home, here are some considerations to keep in mind:

Tips For Buying Your First Home

Are You Already In Debt?

Buying a home can be expensive. If you are already in debt, we suggest you strive to reduce your debt as much as possible (or even get out of debt entirely) before you put a down payment on your first home. If you are unable to pay your mortgage, you will eventually lose the house you’ve purchased, meaning you will also lose a lot of the time and money you have put into that house (not to mention you will have to move again, and probably after you’ve just unpacked everything).

  • It is very common for young soon-to-be first-time homeowners to compare their life progress with the lifestyle their parents had. Many people feel pressured to buy a house because they grew up in a house and it feels like the next logical step after moving away from one’s parents. Young couples who are expecting children (or planning to have children soon) may feel pressured by their family members to move into a large home with multiple bedrooms.
  • Be cautious of running into large commitments like home ownership. There is no shame in living in an apartment or renting a property for a time. It’s always advisable to wait until you’re truly ready before you sign all the paperwork to take out a mortgage on a home.

Always Consider the Long Term

How long are you planning to stay in your current location? If you are planning to get married, have kids, host elderly family members, or move to a different job in the next few years, these life changes can all affect the layout and style of the house that may suit your needs best. Be sure you are taking out a mortgage on a house that you love and plan to stay in for a while. Even if you move to another place, you will still need to pay off the debt you owe, so you should strive to only buy a home when you are certain you will live in it for several years.

  • Consider career opportunities. Would advancements in your current line of work allow you (or require you) to move to another location? Are you willing to pass up promotions that would require you to move?
  • What is the current state of the market? The house market changes frequently, so it’s difficult to know exactly what it will look like if you do eventually move again, but if you do decide to accept a promotion or a new job that requires you to move, you may lose money if you are forced to sell your home during low periods of the selling market

Apply For a Mortgage Before You Begin Looking at Homes

Before you fall in love with a house, be sure you are looking at homes you can actually afford. The housing market tends to be highly competitive, especially in good neighborhoods, and your offer is more likely to be taken seriously when you have a mortgage pre-approval. Speak to your mortgage company and determine how much you can spend before you waste time browsing homes out of your price range, and before you get in over your head by trying to offer on a home you can’t afford.

  • STARK Finance can offer you experience and expertise if you’re looking to take out a mortgage for the first time. Find more information about home loans and interest rates on our blog.

Seek Out a Realtor

A realtor is a person who is interested in helping you find your perfect home, because if you aren’t satisfied enough to buy a home, they don’t get paid. Your realtor can help you stay informed about what things you should investigate while touring a potential home, they are familiar with reading home buying contracts and can help you negotiate a price, and overall they are there to help guide you through the buying process.

Many home buyers are hesitant to hire a realtor, as they believe meeting with one will cause them to pay more than they bargained for when they settle on a house. It is actually the seller, not the buyer, who pays the cost of the realtor, and a good realtor can help you find a house that is the perfect fit for you (and could even cost you less than other homes that would not be as good of a fit for you and your lifestyle).

  • Seek a real estate agent who has been in business for a long time.
  • When possible, choose an agent who is very familiar with the area where you are looking to find a home.
  • Since Australia is so hot, it’s absolutely crucial to buy a home that will protect you from the heat. An experienced realtor can help you know what to look for when touring Australia homes.

Remember the Other Costs You’ll Need to Pay

The most important thing to remember about buying your first home is that putting a down payment on a house and taking out a mortgage means you will be paying off a loan for many years (plus interest). This isn’t the only money you will be paying on your home. When you own a home, you will also need to pay for bills, insurance, and possibly repairs on a regular basis (not to mention the cost of groceries, clothing, vacations, school fees, gifts, and anything else that may seem small on the surface but which adds up over time).

With all of these costs in play, it’s important not to agree to a mortgage that is above your means. A mortgage company may approve you as having the ability to pay a set amount of money each month, but it’s important to track and evaluate your own income and spending over time.

  • Use a mortgage calculator to estimate how much money you would need to pay for a mortgage on some of the homes you are considering.
  • Compare this with your budget. Are there certain costs that you can cut back on?
  • Is a larger house worth letting go of some of the things you love and frequently spend money for?

Your realtor and the mortgage company you’re working with can help you compare homes and discuss payment options, but ultimately, determining whether or not the home you’re looking at is worth taking out a mortgage on is your decision. If that house is not in your price range when all the costs are considered, it may be time to look at other neighborhoods or consider renting a temporary space instead of buying a home.

We hope you enjoyed these home buying tips. If you are thinking about buying your first home, consider scheduling a meeting with STARK Finance today. We are experienced mortgage brokers very familiar with Australia homes, and we are ready to help you make your dream home a reality home.

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