Do's and don'ts of first-time home ownership
Category Advice
Buying property, while it is an amazing experience, it can be quite daunting. Here are a few tips to help make the process a little bit easier for first-time buyers.
Tips on how to successfully buy your first property.
1. Research
When starting your journey into home ownership, it's crucial to thoroughly research the real estate market, property values, and neighbourhoods. Understanding the local market conditions will empower you to make informed decisions and find the right property that suits your needs.
2. Bond originator
Before committing to a particular property, speak to a bond originator who will assist you with the process. Also, very important for first time homeowners is to establish how much you qualify for as well as having a plan and thoroughly researching the areas where you intend buying property. Comparing property prices in that area is crucial to establish affordability in terms of rates and taxes.
3. Budget
Setting a budget is another critical step in the process. It's not just about the purchase price; you should also consider ongoing expenses such as maintenance, insurance, Transfer costs are no longer included in the bond, so cash is also crucial to have on hand and property taxes. Hidden costs can catch you off guard, so it's essential not to underestimate them. Remember to factor in additional expenses like closing costs, inspection fees, and potential renovations when planning your budget.
Creating a clear budget will ensure you don't overextend yourself financially and can comfortably manage your new investment.
Deferring the dream of owning property, for a year or two in order to save towards a larger deposit will decrease the amount you have to borrow, and the amount you pay in the long term.
What is a deposit? A deposit is usually 10% of your purchase price. It is paid to the transferring attorney or estate agent, who manages it on your behalf until the property registration process is complete.
A deposit will:
- Enhance your affordability and increase the likelihood of bond approval.
- Give you leverage when negotiating a more favourable interest rate (due to reduced risk for the bank)
- Minimise the interest you'll pay over the duration of the loan.
- Reduce your monthly bond repayments.
- Enhance your attractiveness to sellers.
- Improve your negotiating power.
4. Don't rush!
One common mistake is rushing into a decision. It's important not to succumb to pressure and take your time to make the right choice for your circumstances.
5. Insurance
When buying your property, make sure you search for a good insurance company to associate yourself with. Understanding the purpose of insurance is key to buying that first property as it helps with deciding on the type of cover you require in alignment with your needs and make sure to understand your policy limitations.
Don't neglect the importance of insurance. Ensure that your property is adequately insured to protect your investment from unforeseen events, providing you with peace of mind. Lastly, avoid overextending yourself financially. It's crucial not to purchase a property that stretches your finances to the breaking point. A
Extract from Property 24
Author: Extract from Property 24
