With housing affordability becoming more favourable to buyers, you could well be thinking about home loans yourself soon. Recently, Real Estate Institute of Australia President, Peter Bushby, said, that affordability is on the up.
“Compared to a year earlier, housing affordability improved in all states and territories,” he said.
This gives many buyers the opportunity to start looking now – anywhere in the country.
Getting a home loan and buying a house is a complex process no matter what, but first home buyers – who are inexperienced in the market by definition – are more likely to miss out on a few key things in all the excitement of purchasing their first property.
Raise your credit score
Like many Australians, you are likely to have several different types of debt – your student loan, car loan, credit cards and others. Your credit history and current level of debt will be used to determine how much you can borrow, so you’ll want to have it looking good before you even think of applying for a home loan. Try to pay down your smaller debts, such as credit cards. You should also make a habit of obtaining a credit report to check there aren’t any errors unfairly hurting your chances of getting a home loan approval.
Get your home loan pre-approved
Once your credit score is looking healthy, you can take the next step and apply for pre-approval on your home loan. This should be done before you start shopping around for a house. Let the bank specialists be your personal home loan calculator, as they determine what amount you’re able to borrow based on your current circumstances and history. Then, you can start house-hunting, feeling secure that you know what your boundaries are and what your repayments could be at different price ranges.
Sort out your budget
If you’re not a number-cruncher, this may not sound appealing, but just because it may bring back bad memories of math class doesn’t make it any less important. If you’ve had your home loan pre-approved, you should have an idea of what your mortgage repayments might be. Now you can investigate your regular costs of living and household expenses, compared to your income, to make sure you can comfortably meet your home loan repayments.
Take care of the practicalities
Once you’ve bought your new home and settlement has passed, you can finally move in. But imagine getting the keys and walking through the front door only to find complete darkness. Switching the power and gas over can be the last thing on your mind during the thrilling home buying process, but it’s an essential one. To compound that, you don’t want important mail going to your old address long after you’ve moved out. Get onto it early and have your mail redirected and utility connections ready and waiting at your new place.