The Greater’s mobile lender for Tamworth and surrounding areas, Virginia Irwin, says purchasing a home for the first time can be daunting but there is help at hand to make the process easy. Virginia offers five tips for first homebuyers gained from her 22 years of experience helping people get their dream home or apartment.
1. Be clear on what you want
Narrow your property search down to preferred locations and the type of house or unit you are looking for. Think about its proximity to work, social activities and resale values in the area.
Many people think they should find their dream apartment or house first and then get finance. It pays to know how much you can afford to borrow so you don’t waste hours looking at property that is out of your price-range or exclude properties that you can afford.
2. Have some genuine savings
Make sure you have some genuine savings, a deposit, behind you. A number of parents are also helping their children with gifted payments which can often be considered as part of your deposit.
When you go to see a lender, have some documents or figures handy that demonstrate that you
- have a history of saving
- know your major income and expenses
- have stable employment
- have a good credit history.
If you aren’t a saver yet but want to start looking for property, still talk to a lender who will be able to help put you on a savings path. Putting money from your pay straight into a Bonus Saver Account that pays higher interest if you make regular deposits and no withdrawals, will help you get your deposit faster and demonstrate an ability to save.
3. Choose the loan that is right for you.
You will find that there are a range of loans on offer at different rates.
The first decision is whether to have a fixed or variable loan. Fixing your rate for a period of time is good for people who need real certainty in terms of their repayments. With variable loans you need to be prepared to make extra repayments if interest rates go up but you will benefit if rates come down. Plus the ability to pay additional repayments to get your home loan down sooner.
Be wary of honeymoon rates or special discounts that offer a cheaper rate initially, often for the first year. If something looks too good to be true it often is. Before rushing in, make sure you check what the rate jumps to once the honeymoon is over. The Greater has some of the lowest fixed rates in Australia and its standard variable rates are lower than all of the major banks.
Make sure your loan has the features you want including phone or Internet banking and the ability to make additional repayments and redraws without penalty or charges.
When comparing rates and loans a good tool to use is the comparison rate. This determines the true rate of a loan, taking into account the upfront costs, ongoing fees, and other fees. Using the comparison rate highlights that the Greater, unlike many other lenders, has very low rates but also very low application costs and, importantly, no ongoing loan account fees or annual fees.
4. Protect your home and income
It is really important to consider insuring your home and protecting your repayment income to make sure you can meet repayments. The Greater offers its home loan customers competitive home and contents insurance and the second person who takes up repayment protection insurance on a loan, receives a discount.
For more home-buying tips or to get started saving for your home contact Virginia or one of our other mobile lenders on the Central Coast, Gold Coast and in the Illawarra by calling 1300 721 253, pop into a branch, or ask a question below.
Do you remember buying your first home? Share your tips with other people below.