Young couple of first time home buyers celebrate outside their first household, which has a sold sign by the front door. This couple can even more to celebrate because they insured their household items with Get Insurance.

What You Need to Know as a First Time Home Buyer

Buying a house is exciting! However, it can also be quite scary. Purchasing property is a big decision and an even bigger financial investment. The process can be overwhelming for first time home buyers looking to make a home. That said, millions of people have been there before you and survived. Although the process involves a lot of paperwork, with the right information, you can find a home you can afford.

Buying a new home is one thing, insuring your contents is just as important. This is where household insurance comes in as it provides you with essential insurance for your valuables.

Questions To Ask Before Applying For A Home Loan

  • Can you afford it?
  • What type of home are you looking for?
  • Have you saved for a deposit?
  • Can you afford the monthly home loan installments?
  • What type of home do you need?
  • Can you afford the additional costs?

Useful Home Buying Tips for First Time Homebuyers

    1. AffordabilityWorking out what home loan amount you can afford is simple – just look at how much of your monthly budget can be dedicated to repayments. There are different ways of how you should calculate your monthly home loan repayments. Some banks have a calculator for home loans, which can help in giving you an idea of how much your repayments will be.Start with your salary after-tax. This amount must cover everything including your rent. Your total monthly expenses are the determining factor. If your expenses are harder to maintain, paying for rent will be harder to achieve.

      When it comes to interest rates, you can choose between a fixed-rate or an adjustable-rate. However, both these require a down payment of 10%-20%. Fixed rates can be categorised as a year, 15 years fixed or 30-years fixed rates. Banks will consider your interest rates and loan terms when calculating how much your total loan amount will be. This again boils down to your affordability on your monthly repayment amount. Once your offer to purchase has been accepted, you can start applying for a home loan.

    2. Extra costsPurchasing a home comes with several once-off additional costs: transfer duties, a deposit, deeds registration, and conveyancing fees. Once the property is in your name, you will then have to pay a levy or rates and taxes on top of your loan repayments. You might also want to consider long-term maintenance costs like garden and pool services as well as paying for security in your area.
    3. Know what you’re buyingIts best to view a lot of homes before making an offer. Don’t be fooled by the aesthetics. Rather focus on the structure of the house. Are there structural cracks? Is the roof sagging? Pay attention to faulty electrical, plumbing, and gas installations. Consider the neighbourhood: how safe is it? You can hire a company to assist with inspecting the property before making an offer.
    4. Follow up on your offerSo, you’ve found the perfect home. Making an offer is the next step. Before you make this move, however, make sure it’s what you want. Cancelling an offer to purchase can cost a small fortune in penalties. Bear in mind, this is dependent on the details of your signed contract.
    5. Check your paperworkOnce your offer to purchase has been accepted by the bank, filling out your home loan application is the final step. It’s wise to compile a checklist as a guideline to assist you with your application whether it be online or at a branch. Household insurance should also be part of your paperwork in order to protect the contents of your new home.

Before entering into this lengthy process, you must do your research. You can find plenty of first-time home-buyers guides online that are packed with tons of information on what to do and what not to do. If you’re buying your first house, why not lay the foundation for a home that lasts?