First Home Buyers Guide.
Essential steps for NSW Residents.
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First Home Buyers Guide: Essential Steps for NSW Residents
Buying your first home in Australia is an exciting but daunting process. There are numerous steps to take, from getting your finances in order, to finding a property and finally moving in. For most of us, encountering new terminologies and steps can be intimidating.
Our guide aims to demystify the process of buying a home in NSW Australia by providing a detailed overview of each step, along with some crucial information for first-time buyers. We aim to provide a sense of control over what is undoubtedly one of the largest and most significant investments in a person’s life by breaking down the process into manageable steps.
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Assessing Finances and Borrowing Capacity
With a realistic budget in mind, you’re ready to begin your property search. The best way to set a budget is to look long and hard at your finances. This includes both the outlay involved in buying a property and the ongoing costs of owning a home.
Remember, there are upfront costs beyond just the deposit, and they can add up. These may include:
- Stamp duty
- Legal and conveyancing fees
- Building inspections
- Mortgage registration fees
- Council rates
- Home and contents insurance
Using online calculators can help you estimate how much you can borrow and what your stamp duty might be, giving you a better idea of the overall costs.
After buying your home, it's essential to think carefully about your finances. You'll need to be able to cover ongoing expenses such as:
- Mortgage repayments
- Property taxes
- Insurance premium
- Maintenance costs
- Regular household expenses
It's also a good idea to set aside a little extra for any unexpected repairs or replacements.
It means taking a good, hard look at your finances – and working out a level of borrowing that not only makes repayments affordable but will also leave you in a resilient position.
Market conditions can also play a role in timing – perhaps your decision will be swayed by interest rates, and if they are currently low compared with recent years, this could encourage you to buy right away. Price trends in your desired areas can also affect your timeline – with price increases, some people might choose to wait and see if prices level off before buying, while others could see it as a good time to buy before prices increase even more.
If you plan to be in your new abode for the long term, short-term market movements may not matter; but an awareness of the broader property market is likely to be of value in knowing when to put yourselves in it.
Make sure to do your homework and get advice from experts to make the most informed decisions with your finances. Mortgage brokers or financial advisors, like the ones at Domaine Homes, can provide personalised advice that is tailored to your specific situation. Contact Domaine Homes today to discuss your financial needs and receive expert advice you can trust.
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Save for a Deposit
Saving a deposit is an important part of the home-buying process. Most lenders in Australia require a deposit of at least 20 percent of the property’s purchase price. For a home worth $500,000, this would mean saving $100,000.
Bear in mind that while smaller deposits are an option, they usually come with extra premiums. For a deposit less than 20% you could be required to pay for Lenders Mortgage Insurance (LMI) which is an insurance that protects the lender in case you are unable to pay back the loan.
This can make buying a house more expensive. The premium is generally paid in one lump sum, and can run into the thousands of dollars.
And, if you can’t put aside a large deposit, all is not lost. You can go for a low-deposit mortgage or one of the government schemes to make first-time buying easier.
One such alternative is a deposit boost loan. A deposit boost loan allows you to buy a home without having to save a significant deposit upfront. This is a good option if you can actually afford the monthly mortgage instalments, but don’t have the cash to save up all at once.
Buyers can also use a savings calculator to work out how long it will take them to save their target deposit. A savings calculator can help you work out what your deposit will be (if you have one already) and how long it will take you to save your target deposit. It will also help you plan a realistic timescale for purchasing your home.
Contact Domaine Homes’ mortgage brokers to discuss the various deposit options and find the best solution for you.
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Securing the Ideal Home Loan and Pre-approval
As you start your journey to buy a property, it's essential to look at different home loan options and get pre-approval. This helps you understand your financial situation and gives you an edge in the competitive housing market.
Researching different types of loans is important. You should compare interest rates, whether fixed or variable, loan terms, features, and any associated fees. Some lenders also offer specialised products like deposit boost loans that can be combined with your main mortgage.
Getting pre-approval is a valuable step in buying a home. It’s a preliminary assessment where a lender reviews your financial situation and tells you how much they’re willing to lend. This can be really helpful when you're at auctions or negotiating with real estate agents.
To start the pre-approval process, you need to fill out a form and provide detailed financial information. The lender will then assess this information to determine if you’re eligible. If approved, you'll receive a letter of offer that outlines the terms and conditions of the loan.
With pre-approval in hand, you can confidently look for properties within your budget. This step makes the house-hunting process smoother and allows you to move quickly when you find the perfect home.
Let Domaine Homes help you get pre-approval. Reach out to us to begin your journey to homeownership with confidence.
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Begin House Hunting
Once you have established your budget, you can commence looking at properties and potential suburbs. Domaine Homes can help you with this. Think about how you would like to live and what features matter to you. Looking at open homes and display villages online or in person is a great way to start.
Local real estate agents can be good sources of information about certain areas. Speaking to them can offer you information about an area or even a particular property.
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Price your dream home!
Design your dream property today and build out to suit your budget.
Don’t settle for someone else's home create yours the way you want it.
Start the process to your first home today.
Don’t settle for someone else's home create yours the way you want it.
Start the process to your first home today.
Secure a Home Loan
To move forward with buying a property, securing a home loan is crucial. If you already have pre-approval, this process can be easier. It's important to compare different loan options to find the one that best suits your needs.
Applying for a home loan usually involves providing detailed financial and employment information. You’ll need to gather important documents like:
- Tax returns
- Savings account statements
- Pay slips
- Credit card history
Lenders will do their own property valuation to decide the loan amount. They review all the information you provide to determine if you qualify for the loan. This careful assessment helps make sure that you can comfortably manage your mortgage repayments.
Domaine Homes' mortgage brokers are ready to help you find the best home loan for your needs. Get in touch with us today to get started.
Schedule Property Examinations
Undertaking a thorough inspection is a vital step in buying a property. You should always do a general building inspection and a pest inspection.
A general building inspection will check the structure of the property to ensure that plumbing, walls and roofing are in good condition. This way, you can identify any costly repairs before they become bigger problems.
A pest inspection, on the other hand, will reveal signs of termites and other pests that might damage the property’s structure. Both inspections should be conducted by certified professionals to ensure that the results are accurate and reliable.
The best way to make the most of these inspection visits is to use a comprehensive checklist so that everything is covered.
Presenting a Property Offer
Once you have identified a suitable property, you would make an offer to buy it. In most cases, there are two main methods of purchasing a property: through private treaty or auction.
In a private treaty sale, the buyer and seller negotiate directly with one another in order to settle on a price. This process tends to offer more leeway for discussion and conditions than auctions.
Through an auction, a property can be sold in an environment where there are multiple buyers competing for the product.
In the case of private treaty sales, put in the legwork to do some homework on local property values before launching negotiations. You’ll know what to expect and be able to make informed offers.
Once price is agreed, the next step would be a formal written offer. A real estate agent might ask the purchaser for an initial deposit as a sign of good faith. However, it is refundable and no contracts have been exchanged so the property is not guaranteed.
Exchange of Contracts
The exchange of contracts is the final commitment in buying a property, whereby each party commits to the other formally by exchanging signed contracts. At this stage, the deposit payment is usually made by the buyer, which is often 10% of the purchase price. The deposit binds the seller to transfer the ownership of the property and the buyer to buy.
Sometimes in NSW, however, contracts are exchanged with a clause that finance approval is a condition of the contract – allowing the buyer some breathing space to firm up their mortgage arrangements after exchange.
Almost all states offer a ‘cooling-off’ period: usually, after a contract exchange, the buyer has 5 days in which to cancel the sale, though a fee (a percentage of the purchase price of the property) is usually involved.
Remember that properties bought at auction are not covered by a cooling-off period. Make sure you’re prepared and ready to commit before you start bidding.
The contracts are exchanged, and the settlement period begins. This is when all the last-minute preparations for the conveyance of property are finalised.
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Final property check
It is advisable for you to do a thorough inspection of the property (and property documents) shortly before settlement, so that you can ensure that everything is in good working order and no unforeseen matters have arisen since you inspected the property.
Property transfer day
After the seller accepts the offer, the day of the settlement – when the title of the property is officially transferred to the buyer – marks an important milestone in the purchasing journey. The settlement is expected to take place roughly within six weeks after signing the contract of sale, though it depends on the circumstances.
On that day, the buyer’s bank or mortgage lender makes the final payment for the remaining purchase price plus any applicable taxes and fees. Once the payment clears, the buyer is given the keys and assumes the legal ownership of the property.
While this is a crucial part of the process, the transaction can take place without the buyer and seller ever having to meet. Instead, conveyancers and estate agents work behind the scenes, dealing with the paperwork on their clients’ behalf. They each guide their clients through the process, ensuring that property ownership is transferred and that all the right documentation is in order.
Time to Settle In
The big day has arrived! Time to move into your new place. Settlement day is when the seller officially transfers ownership of the home to you, and while some buyers settle and move in on the same day, you don’t have to. Many buyers schedule their move a few days later because transfers of funds or paperwork can sometimes cause delays.
Then, once you have the keys, and all the legal matters are settled, the fun starts. You can start to move things in and turn the empty house into your castle. And then you get to live in your castle.
Making the most of your property purchase
When you decide to purchase a house, it is a big step. Sometimes the process can be difficult, but if you are well prepared and stay organised, it can be a rewarding experience. It is important to divide it into phases and to get expert guidance if it is needed. By treating it step by step, you can feel satisfaction and joy when you get closer to your own home.
Common Questions for First Home Buyers
What measures should new homebuyers consider?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
How does one seek a first home buyer grant?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
What are the qualifications for the first home guarantee scheme?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
What deposit is typically needed for first-time buyers?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
How do stamp duty concessions benefit new home purchasers?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
What financial advice is recommended for first property purchases?
New home buyers should first evaluate their financial situation, decide on a budget, save for a deposit, research the property market and get a mortgage pre-approval before going out into the market. They are also advised to meet with a financial advisor or a mortgage broker to provide guidance about their next steps in home buying. You should also attend a few open houses and property inspections as these will give you a clearer perspective of the market and building conditions.
Price Your First Home!
Design your Dream First Home today from our top housing First Home Buyer designs. Build out to suit your budget and start the process to your new chapter.
