Buying your first home is an exciting and significant milestone in your life. It can also be a daunting task, especially if you are unsure of what to expect. As an first home buyer in Australia, you need to have a clear understanding of the steps you need to take to ensure that the process is smooth and stress-free. Here are 6 expert tips to help you navigate the process of buying your first home.

Tip 1: Savings

Saving money is the first step towards buying your first home. You will need to save for a deposit, which is usually around 20% of the purchase price of the property. However if you can’t come up with 20%, alternatively you can save a 5% deposit of the purchase price by using government grants. You can also consider opening a high-interest savings account to make the most of your savings.

Tip 2: Taking care of your credit report/scores

Your credit report and score are essential when applying for a home loan. Lenders will look at your credit history to determine whether you are a responsible borrower. You can take care of your credit report and score by paying your bills on time, not taking on too much debt, and checking your credit report regularly for errors. You can find free online credit score agencies to check where you currently stand.

Tip 3: Income & expenses

Before you apply for a home loan, you need to have a clear understanding of your income and expenses. You will need to provide evidence of your income, including payslips, tax returns, and bank statements. It’s also essential to have a clear understanding of your expenses, including any debts you may have. It’s always advisable to see where you can make more money, whether that be working a second job or working overtime.

Tip 4: Budget planning

Creating a budget is an essential step when buying your first home. You need to have a clear understanding of your income, expenses, and how much you can afford to repay each month. You can use a budget planner to help you work out your finances. When budgeting, put away your savings first, and use the remainder for your spending, instead of the other way around. Know the purchase price of your home and work towards the deposit amount as your budget goal. If you’d like to learn more about budgeting, read our latest post: How To Set Financial Goals for 2023

Tip 5: Taking advantage of government grants

The Australian government offers various grants and schemes to help first home buyers get into the property market. These include the First Home Owner Grant, the First Home Loan Deposit Scheme, and the HomeBuilder Grant. You can find more information about these grants on the Australian government’s website. Remember that eligibility is subject to what state you live in.

Tip 6: Don’t be afraid of debt

Taking on debt can be intimidating, but it’s a necessary part of buying a home. However, it’s essential to understand the risks and responsibilities that come with borrowing money. Make sure you can comfortably afford the repayments, and don’t borrow more than you can afford.

In conclusion, buying your first home in Australia can be a challenging and exciting process. By taking the time to save, plan your budget, and take advantage of government grants, you can make the process less daunting. Remember to take care of your credit report and score and not be afraid of taking on debt, as long as you can comfortably afford the repayments. With the right approach, you can achieve your dream of owning your first home in Australia.