First Home Buyers Guide
Escape Renting have helped countless first homebuyers successfully purchase their new homes. Make use of our team’s expertise and let us take you step-by-step through the entire process.
Are you ready to buy your first home?
We understand that the idea of owning your first home is an exciting thought, and yes, it’s good to get excited! However, before you get carried away with picking out colour schemes and bathroom tiles, it’s important that you consider how purchasing your first home is going to impact your life.
Owning a home comes with financial responsibilities. With regular outgoings it is important to consider how you will fulfill these regular payments, even if it means giving up a few luxuries to begin with.
Choosing your first home
Our team will review your financial situation to determine if and how much of a deposit you have, along with your eligibility for government incentives such as First Home Owner’s Grant, Homebuilders Grant, First Home Loan Deposit Scheme and First Home Super Saver Scheme in order to ascertain what is referred to as your borrowing capacity.
In essence, this amount will determine how much you have to spend on your first home. Once we know your borrowing capacity, it’s time to start looking at where and what you would like to buy (this is the fun part!).
Location, location, location
First things first, you need to decide where you want to live. Chances are you will be living in your first home for a number of years, so it’s important that you are happy with the location of your home. In deciding what is the right location for you, make sure you think about:
- How long is the commute to work?
- Are you happy with the schools in the area?
- What recreational activities interest you?
- Is there any upcoming development in the area?
- Proximity to family and friends.
- Amenities such as shops and transport links nearby
Picking your home
To a large extent, your desired location and the amount you have to spend on your first home will determine the type of property options available to you. Our team works with builders and developers throughout Australia to source a range of home and land packages so that we can give you as many options as possible.
Why buy a new as opposed to second hand?
The standard of home building in Australia has never been higher than it is today. Our approved building partners offer some of the highest quality modern homes available on the market with excellent standard fitted features to make your home more comfortable and all under warranty for peace of mind.
The best part about buying new as opposed to second hand is that everything in your home is brand new and untouched by previous owners. Most home packages that we offer are designed with a neutral pallet so that when you move in you have a blank canvas to personalize the design and turn your brand new house into a home.
Further, modern building techniques allow for more energy efficient homes, which means lower running costs than a 10-year old second hand property.
Preparing to buy your first home
The costs of moving home
Once you’ve settled on a location and picked your ideal home, its time to get serious about buying. There a number of costs involved in the process of buying your own home. Aside from the deposit, you will have to consider payment of legal fees, registration fees, loan fees and maybe even removal services.
Here’s our guide on what professional service fees to expect:
The solicitor’s role is to review the contracts and approve all paperwork to ensure that legal title is passed onto the new homeowner. As a first time buyer, we understand you don’t need to be worrying about the intricate legalities of purchasing your new home, so we suggest leaving it to the professionals. If you come onboard with us, we will introduce you to our list qualified independent solicitors who specialise in conveyancing and can take care of all of the legal work for you.
In almost every case, your mortgage provider (i.e. the bank) will require you to have a survey carried on your new home for valuation purposes. This will determine how much the mortgage provider is prepared to lend against your new chosen property. Typically the mortgage provider will send out one of their own valuers to conduct the survey, as they want to protect their own interests.
There are a number of one-off costs charged by the government and lending institutions that may also be incurred in the process of purchasing your first home. Some of these costs include transfer registration fee, mortgage registration, lenders’ mortgage insurance and loan establishment fee. While typically these individual costs are not excessively high, they can add up and are still something to consider when purchasing your first home.
If you’re a first time buyer, you may not have much furniture to move! But if you do need help, we always advise getting a number of quotes as prices can vary quite a bit.
Living in your home
Also make sure you remember to factor in the cost of living in your new home. As a homeowner you will have to manage your monthly outgoing to ensure you stay on top of energy bills, rates and insurance costs.
Why now is a good time to buy?
- Interest rates are at a record all-time low!
- Mortgage repayments are typically less than the weekly rent you are currently paying towards your landlords mortgage
- Government incentives of $15,000 (QLD) or $10,000 (NSW) are available through the First Home Owners Grant
- First home buyers don’t pay Stamp Duty*
- Residential land is becoming more scarce for new developments. This means that land prices will likely increase and block sizes will decrease in the future.
*Based on the land value of up to $250,000 for Qld and $350,000.00 for NSW
Why should you stop renting?
Australia is a nation of aspiring homeowners for a number of reasons:
- Your monthly mortgage payments are an investment in your biggest asset.
- Property prices have historically always risen. Whilst none of us have a crystal ball, investing in property now could make you a profit in years to come.
- You’ll own your home at the end of your mortgage term, and then you can live there free of charge.
- You have the power! Not only can you choose how to decorate your home, you can also be in control of when things get fixed, and which electricity supplier you use.
- There is no landlord to unceremoniously end your lease when you’d like to stay. It’s your home, and you choose how long you live there.
First Home Owner Grant (FHOG)
First Home Owner Grant scheme was introduced on 1st July 2000 to offset the effect of the GST on home ownership. It is a National scheme funded by the States and Territories and administered under their own legislation.
Under the scheme, a one off grant is payable to first home owner that satisfy all the eligibility criteria (hyperlink to government website).
The Queensland First Home Owners’ Grant is a state government initiative to help first home owners to get their new first home sooner. You’ll get $15,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000).
*reference to government website.