Taking the Stress Out of Finance – Tips for First Home Buyers

If you’re thinking about building your first home but you’re not sure where to start, then we know how you feel. Before getting into the building industry, we were just as perplexed and overwhelmed by the prospect of building a home as any first home buyer would be. We weren’t sure that a bank would even take the time to sit down with us let alone give us an extensive loan spanning the next three decades. At the time, we had no idea where to start and what questions we needed to ask. Since then, we have dedicated ourselves and our business to helping first home buyers who might be feeling the way that we did, and a big part of that is helping them to understand their finance options. In this blog, we’ve collated some of the important things that you’ll need to think about when it comes to obtaining finance for your new home.

Interest rates

It’s important that you do your research in order to secure the most affordable interest rate. Your first step should be to check with your current financial institution, as they may be able to offer you a competitive rate, but this shouldn’t stop you from looking elsewhere. Getting an affordable interest rate will save you a lot of stress and money in the long run, particularly considering that most loans last for decades, so make sure that you explore all your options.

Your credit rating

The first thing that you’ll need to present to a bank is a recent bank statement. You should be thinking about making some lifestyle changes in advance of your meeting with a bank. For example, try to avoid incurring any debts, this can range from small purchases on Afterpay to larger debts, like a holiday or new car loan. The bank may be particularly hesitant to provide you with a loan if it is evident that you have not been keeping up with existing loan payments, so make sure that you are up to date. If a bank is concerned that you may not keep up with loan repayments, they may deny you the loan altogether (or at least the amount that you’re asking) or make the loan contingent on you taking out mortgage insurance, which can be costly.

Forgotten costs

When exploring your finance options, you will likely have so many different clauses and figures thrown at you that it’s easy to forget about some of the hefty costs that come with purchasing a property. These include stamp duty, real estate agent or conveyancing fees and costs associated with building inspections. We recommend factoring all these things into your budget to make sure that you don’t get caught out or blindsided by these easily forgotten fees.

While it’s important to be prepared and well-informed when planning to build or purchase your first home, understanding finance options can be a complex and difficult process for anyone to grasp. If you’re after some guidance, contact our team and we will arrange for you to meet with our experienced construction broker who can simplify the process for you.