Buying your first home can be daunting, exciting, and intense. There are so many things to consider, but it is crucial to make sure you know how to manage each step.

Step One: Am I ready? 

Before making any decisions about purchasing property, it is generally a good idea to sit down by yourself (and your spouse if you have one) to understand your motivations, financial situation and personal ambitions.

Helpful questions might include:

  • Am I feeling wanderlust? Do I intend on living abroad in the coming years?
  • Do I want to buy property because I am in the right financial and personal position, or am I scared of missing out on a good deal and trying to “time the market”?
  • Is my job secure, and do I have the financial means to take on this commitment?

If you’re not personally or financially capable of taking on a mortgage, there is a high likelihood that your purchase could end up a disaster!

Step Two: Understand the costs of purchasing a house in Australia

While this is not a definitive list of expenses that come with the purchase of a home, it may provide a helpful indication:

  • Lenders Mortgage Insurance: If you cannot provide a 20% deposit, typically you will be required to pay lenders mortgage insurance which can become quite expensive. Check out Westpac’s LMI Calculatorto get an idea of how much you may have to pay.
  • Stamp Duty: The amount you will be charged for stamp duty will depend on your state. If you’re a first-time home buyer, there are likely stamp duty exemptions or concessions that you’re eligible for. Check out this website to see what you will qualify for.
  • Conveyancing fees: Although this may vary, conveyancing fees will likely cost a few thousand dollars and should be taken into account for budgeting purposes.
  • Inspections: Make sure you set aside money to ensure that your property is not infested with pests and is structurally sound. These inspections might cost anywhere from $500 to $1,000. However, this is an excellent long-term investment because if the property turns out to have termites or was not built properly, you will save yourself headaches and cash down the track. If you’re looking to avoid issues associated with existing homes, consider if a home and land package is right for you.

Step Three: Find a Lender

Finding a reputable, honest, and competitive lender can be difficult. You should be familiar with the different types of home loans you can receive.

If you want security in how much you’ll have to pay for your mortgage repayments, a fixed rate home loan could be a good fit or you. This allows you to budget with confidence in the long term.

However, if you’re expecting interest rate cuts you might feel comfortable with a variable rate mortgage.

If you’re planning on buying a home & land package, you should familiarise yourself with construction home loans. Most reputable lenders will package a standard home loan and a construction loan together so that you can purchase property and build your home on one loan. Consolidating these two loans will reduce confusion and simplify the finance process.

Once you’ve found your lender and know which loan you need, get preapproval from your lender.

If you’re looking for a reputable mortgage lender and exclusive rates, Ownago partners with Australia’s most highly rated lenders, click here for more info!

Step Four: Clarify your Criteria

Because home-buying can be such an emotional process, it is crucial to make sure that you have a clear understanding of what you’re after.

Here are some things to consider:

  • Are you looking in a specific suburb or a broader region?
  • How close to work, school, and shops do you need to be?
  • Do you need to use public transport?
  • Is the area growing?
  • How many bedrooms/bathrooms do you want?
  • Do you need a yard or an alfresco?

Trust your intuition! If something feels off, it probably is.

Step Five: Start Your Search!

Don’t be shy! This is the time to begin calling up real estate agents, informing them of your criteria, and asking if they know of any properties that match your criteria. Feel free to ask them questions you might have about the area, the property market performance in the region, and anything else that comes to mind.

If you have especially strict criteria and you can’t find anything listed that meets your criteria, employing a buyers agent may be helpful.

If you’re thinking of buying a home & land package, you’ll want to explore online resources. It would be worthwhile checking out our online platform, Ownago, to see our available estates and home designs. You can pair your perfect block of land with your ideal home design to customise your home & land package to suit your specific need!

If you’re unsure about whether a home & land package is the right option for you, check out this article.

Step Six: Purchase your new home!

You’ve made an offer! Now you’ll want your conveyancer to review the contract of sale and ensure any inclusions are marked in the agreement. Your conveyancer will likely be able to organise your home inspection to check for pests and to ensure the structural integrity of the house is up to scratch.

Now, you need to exchange contracts and pay the deposit. If you’ve bought the property through private treaty, and not at an auction, you have a period where you can back out of the sale (but you will have to pay a fee).

You generally have around six weeks between the exchange of contracts and settlement, where you will have time to finalise your finance along with home insurance.

Once you pay stamp duty and your lender transfers the remainder of the balance to the vendor, you’ll officially own your own home!