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6 tasks to do before you buy your first home

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If you’re thinking about buying your first home, you probably already know just how big of a milestone that is. Being able to finally settle down in a new home is rewarding, but it doesn’t come without a lot of preparation. Before you decide to purchase your first property, it’s important to know and understand some of the things you might do in order to make the process an easier one. Here are 5 things to do while preparing to buy your first home.

1. Look at your finances

One of the most important things to have in order are your finances. It’s important to know what you have ready to invest in a home, and what you think you will be able to make in the time leading towards your purchase.

Take a look at your financial history and calculate how much of your disposable income goes into your lifestyle needs and how much of it is saved. It can be a good idea to plan ahead. Think about how much you can afford to repay monthly and leave a buffer for other unexpected expenses that might come your way.

It’s also worthwhile checking your credit file and figuring out where you need to save cash and whether you need to make any changes to your financial responsibilities. This might include cutting out any unnecessary credit cards you own and catching up on any repayments. Home loans are a long term commitment and it’s important to know whether you can responsibly and efficiently pay off one.

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2. Save a hefty deposit

After you have considered your financial situation and have planned for all your expenses and potential future changes in your financial power, the most important step to getting approved for a home loan is saving a sizeable amount. The higher the proportion of the total value of your desired property you can pay upfront, the easier it is for you to get a loan and also to repay it.

Having a hefty deposit saved indicates your financial freedom and reliability to potential lenders which can make trusting you all the more easier for them. Consequently, lenders are more willing to approve your loan and offer you a lower rate of interest at the same time. Also, if you pay a greater portion of your home’s asking price out of your own pocket, you end up borrowing a smaller amount and are required to repay a lower amount in this way.

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3. Find the perfect home loan

african-couple-working-on-finances Once you’ve figured out how much you can afford to repay over the course of your home loan, it’s time to start hunting for one that meets all your needs. Finding the right home loan for you can be overwhelming since they come in all shapes and sizes. The market is competitive and lenders have certain criteria that need to be met by potential borrowers. Finding the loan that suits your circumstances and lifestyle is imperative so shop around online here.

Home Loan Specialists can help to make this entire process easier by doing all the hard work for you. After looking at your budget and understanding what terms you’re comfortable with, they can go out and find lenders who are able to assist you in those ways. Chat to a Home Loan Specialist today to help you find the right home loan.

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4. Research the local property market

Before going out to find the perfect house, you might find that creating a list of the things that you need in a home and its location can help narrow that search down. Understanding the local property market in your city once you’ve got the terms of your home loan settled and approved will simplify the process of finding that home.

Consider your job’s location and the potential commute to work. Finding a property that’s close to public transport might be very important to you. Whether you already have children or plan to start a family, your priority might be finding a home that’s within a school’s catchment zone.

Understanding why a certain suburb’s property prices might be going down and considering what would happen in the future if you were to resell will help guide your selection. Keep an eye out for any up and coming neighbourhoods, as watching the market before house hunting can help save you money in the long run.

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5. House hunting and inspections

aussie-suburb One of the more exciting tasks to do before buying a home is the actual search. Going to open houses and inspections helps to paint a picture of the home you want to live in. It’s a good idea to keep an open mind while house hunting and to not get too attached to any particular one. Keeping your options wide helps to pick and choose between potential homes.

During your house hunt, it’s important to inspect big and small things alike. From whether the layout of the house itself interests you, to whether the roof gutters are rotted or faulty. Small problems can lead to bigger and more expensive issues that need to be repaired. To avoid surprise, get a free price value estimate for any property in Australia.

Maintenance that hasn’t been covered during a house inspection or the settlement process means that you might find yourself set back a few thousand dollars. Things to keep an eye out for are cracked or worn out walls, rotted floorboards, any electrical or plumbing issues, faulty heating and air conditioning systems, mould, structural damage, pest infestations and roof damage.

More than anything, make sure that any house you shortlist makes the budget you’ve set yourself. Consider how much the deposit for a home is and whether that aligns with the terms of your loan.

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6. The legal bits

Once you’ve decided on a property, it’s time to prepare any legal documents with a conveyancer or a lawyer. They will help to finalise settlement agreements between yourself and the seller. A conveyancer will:

  • Get a property valuation
  • Review the contract the seller offers
  • Transfer the titles of the property to you
  • Conduct survey and building reports
  • Conduct home inspections
  • Revise terms and conditions
  • Settle the property exchange contracts

While some of these things can be done on your own and can save you a lot of money by doing so, it can be easy to make mistakes and present incorrect information or details. A small mistake can mean disapproval and the delay of your settlement. Getting a licensed professional to handle the legalities of owning a home can cost you anywhere between $500 and $2500, but will help to ease the home-owning process and get you living in your dream home quicker.

It helps to prepare yourself for any big milestone in your life. The journey to owning your first home is long and filled with ups and downs. To best overcome any complications in your application process and to get the most out of your home loan term and property, make sure to check your finances, know your budget, understand the property and housing market and settle on a house with the help of licensed professionals.

Talk to a Lendi Home Loan Specialist today to help get you started on your journey to owning a home. Find out how to buy a house in 9 easy steps here.

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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

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Important legal stuff

COMPARISON RATE WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years.
Lendi is the trading name of Lendi Pty Ltd, a related body corporate of your licensed credit assistance provider, Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence Number 442372). We will never sell your email address to any third party or send you nasty spam, promise.
EXAMPLE: This example is current as at 20th October 2016. A Click Loans Online Principal and Interest Loan of $150,000 over 25 years has monthly repayments of $767. This is calculated based on the interest rate of 3.69%, comparison rate of 3.69%, upfront fees of $0 and annual fees of $0.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
Lendi is a privately owned and operated Aussie business. Our mission is to provide Aussies with the right experience when choosing a home loan from our panel of major and non-bank lenders including Click Loans which is a wholly owned subsidiary of Auscred Pty Ltd and a related body corporate of Auscred Services, your credit assistance provider. Although Lendi compares over 1600 products from over 30 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 40% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. We have an independent and founder led board.
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