Buying your first home is one of those life occasions that can invoke both excitement and terror, both at the same time. The excitement is dreaming big and spending days looking at property until you have some knowledge of your local real estate market. The terror is the reality of signing up for a mortgage that may take years to repay.
Where to Start?
The starting point is to find out how much money they can borrow. This will vary depending on individual incomes, the size of the deposit and the policies of various lending institutions. Saving enough for a reasonable deposit is a big obstacle for first home buyers, so most state governments have a range of assistance programs. For example, in Western Australia, eligible applicants can access up to $2,000 to help reimburse them for incidental expenses associated with purchasing a home.
Incidental Expenses Plus a Deposit – Are You Kidding?
What are incidental expenses? As if saving a deposit wasn’t hard enough, other costs that need to be covered are mortgage registration fees, conveyancing fees, valuation and inspection fees, mortgage insurance premiums and lending institution fees. This is not a complete list as these costs can vary from state to state and this program may not be available in every state.
State Government Grants to Help Out
The biggest assistance package for first time home buyers is the First Home Owner Grant that is offered by most states, including Western Australia. The grant provides up to $10,000 to those eligible, and again, this amount can vary from state to state. This is an excellent boost to the finances for those buying their first home. There may be time limits on the application process, so it is wise to check the eligibility criteria before making any decisions.
Our property sales professionals here at Bunbury Real Estate know our local market and are ready to assist first home buyers find a suitable property at a price they can afford. We also can help with general information about these grants and other actions that buyers should take before deciding on a property, but as in most matters, they should also seek other independent advice.
Keep Some Extra Cash Aside
This could be in the form of valuation fees and building and pest inspection fees to check for faults or other problems. Stamp duty is levied by the state governments, payable by the buyer and is calculated on the selling price. Buyers should also insure the property immediately they sign the contract of sale. Calculating these costs in advance and setting money aside to meet them will allow the first home buyers to enjoy their new home without immediate financial stress.