First Time Buyer Guide
Being a first-time buyer is an exciting opportunity, but knowing how to get to the point when you own your home can be confusing. As a first-time buyer, there are usually lots of different offers around to help you afford the property that you want, but before you start looking at those offers there are some steps that you need to take.
Saving for a down payment
When buying any property, you need to have a down payment this is usually required by money lenders as an agreement for them lending you money for the mortgage. Depending on which lender you choose depends on the percentage that you need to put down on a house. Some lenders will accept the minimum amount, around 5% of the overall property cost, however, some require more such as 10% plus. This would mean, for example, if you wanted to buy a property that was $220,000 you would have to save at least $11,000 for a payment.
Some people choose to save more for a down payment, this just means that your mortgage term may be reduced, or how much you would pay in mortgage per month will be less. There is no maximum deposit you can put down however, many mortgage advisors suggest that you should focus on an incremental 5% because any amount in between these numbers won't make a huge change in how much you have to pay.
The Actual Saving
Once you know how much you need to save for a deposit, the saving needs to start. There are lots of different options on how to save your money such as standard savings accounts, high-interest savings accounts or special first-time buyer accounts. Each of these has different pros and cons however, finding an account with a high interest rate means that your money will increase faster, leaving you to be a homeowner quicker.
Budgeting
First-time owners sometimes fall into the trap of having saved a decent-sized down payment but not considered their daily or monthly outgoings. Mortgages are big sums of money that need to be paid every month and if it's not currently in your budget, you need to make sure that you'll be able to afford it. By using a mortgage broker or mortgage advisor, they will help you with this step, but it's worth doing a monthly budget planner just so you are aware of how much expendable income you will have left at the end of the month.
Mortgage broker
The next step is to meet with a mortgage broker. Mortgage brokers are passionate about finding their clients the best mortgage to fit the best property for them. They are incredibly knowledgeable about Special First-time Homebuyer Loans and will work with some of the best companies to get the best results for you.
When meeting your mortgage broker for the first time, you need to take specific ID documents, payslips and any documents such as credit card statements or student loan bills etc. This is so they can input the data into their systems to find you the best deals on a mortgage.
Buying a home may seem like a big responsibility but it doesn't have to be a scary one!