Here’s how to buy a home and keep your bank balance (and relationships) intact
Buying a home can be a daunting and difficult process — especially if you’ve never done it before.
Before you even get to the point of purchase, there are important conversations to have if you’re buying with someone else, paperwork to get in order, professionals to see and money to save.
Whether you’re steadily working towards buying your first place or simply curious about what it takes, we’ve pulled together a guide to highlight what’s ahead to help you avoid or overcome common stumbling blocks.
Saving a deposit and understanding what’s ahead
If you’re planning to buy in the next year or so, this timeline outlines what you could be doing 12, six and three months out to make it happen.
It includes speaking to a mortgage broker (here’s some tips on how to find one you trust), and setting a realistic savings goal — with a time frame that you can stick to.
How to save:
Don’t rely on willpower: It is hard to stick to saving goals, but there are strategies you can use when willpower is flagging, such as using automatic transfers that sweep money into a separate account every time you get paid.
Explore salary sacrificing: You can use salary sacrificing to help buy your first home by withdrawing up to $30,000 in voluntary super contributions, as well as the amount’s earnings.
Budget and plan: Ross and Sangita worked three jobs to save for a block of land west of Melbourne, and then followed these budgeting and planning steps to buy an investment property.
Get creative: Rentvesting is another way to enter the property market, but if you’re searching for more radical options to save for a home, try living in a shack without electricity or water.
Borrow the best amount for you: Here are three questions to ask yourself before taking out a home loan.
Buying with someone else?
The main thing when buying a home with a partner or someone else in your life is to have the right conversations about it beforehand, which includes the different ways you can own property together.
Other things to consider
Joint bank accounts: You may also set up a joint back account with the person you’re planning to buy with. Before you do, assess whether it’s right for your situation. Shared life goals work better for shared bank accounts.
Compare your money values: Ask your partner questions about money, such as, “Do we have equal say on how we use our money, no matter who earns more?”
Think carefully about co-ownership: Co-ownership can help you afford a home, but it can also be risky, especially when buying property online.
Checking out the market
Before you start inspecting properties, it’s a good idea to know the type of property you’d like to buy, the location and how to keep your wits about you when you see something you like.
House or apartment? What kind of property you buy might depend on how much you can borrow. Here’s a look at how lenders calculate how much they’re willing to loan you.
Inspection checklist: When inspecting properties to buy, there are five things you should always check that most people miss. Sussing out the neighbourhood is just one.
Stay focused: It’s easy to get emotionally attached when there are so many tricks real estate agents use to suck people in (cue scented candles and jazz tunes).
City or regional? Two couples shared with us the benefits and drawbacks of leaving Sydney for a regional town.
When it’s time to buy
There are a lot of people who will be involved in the home buying process — get to know who is who.
Finding the right financial adviser is a good start; you’ll want to make sure there are no potential conflicts of interest.
Learn from those who’ve already done it: Chat to your peers about what they discovered along the way. Take it from this first home-buyer, there are a bunch of things he wish he knew before he took the leap, including you don’t need a 20 per cent deposit, and pre-approval is no guarantee banks will give you a loan.
And think ahead: Thinking long term and planning cautiously is also good advice, says this Gen Y, who finally “caved” and bought a property in Sydney.
Taking care of yourself when life changes
It’s moving day! Cue stress and madness.
Packing and moving tips: We’ve got you covered with some tips from removalists on making moving house easy.
Plan for the worst, hope for the best? Of course things don’t always go to plan, and when you break up with someone after buying property together, it can get ugly. Keeping a level head is important, experts say.
It’s not easy to enter the property market and we hope this guide makes things a little easier, whether you’re able to take the plunge or simply reach one rung. Good luck!
Source: ABC.NET.AU | Here’s how to buy a home and keep your bank balance (and relationships) intact