Buying a home is a life-changing process, no matter at what age you are. If you’re new to the property market and are buying your first home, it can be confusing and challenging. However, if you follow a few basic steps, you’ll be able to secure your dream home with no problem at all.
In fact, if you’re in the market for your first property, you can obtain a First Home Owners Grant from the WA government. This grant gives you $10,000 to purchase your first home, which is a big help for new home buyers.
If you’re a new home buyer and want to learn about how to purchase a house in 2020, read our guide below!
1. Have A Plan
First, you have to ask yourself if you’re ready to buy a house and determine what your goals are. Are you ready to settle down? Are you confident in your job security? If you are, then list the criteria that you want in a house and what’s your future plan now that you’ve decided to buy a home.
Also, evaluate your finances and budget. Knowing your financial situation will make it easier to figure out what you can afford. If you have multiple debts, try paying them off. That way, you can secure a larger loan amount.
2. Search For A Property
Once you’ve figured out your finances, it’s time to search for a property. Use the house criteria list to narrow down the potential homes that fit your needs. You can also check out our house and land packages – available in a wide range of designs at very affordable prices.
When researching potential homes, consider the location and development of the area. If you’re starting a family, the suburb must be a conducive place for kids and have access to services and public transport. Don’t forget to consider the type, size, and design of the house too.
3. Get Pre-Approved
Before you select a property to purchase, get yourself pre-approved. This gives you a ballpark number of how much you can borrow, increases the chances of getting your loan approved, and shows that you’re a serious buyer. You’ll need to prepare a few documents including identification and financial statements for the pre-approval check.
Don’t forget to apply for the first home owners grant, especially if you’re in WA. If you’re not sure if you qualify, just contact us and our Qualifiers will be able to help you.
4. Apply For A Home Loan
Before applying for a home loan, make sure to compare different mortgages to find the right one for you. Find out the term of the loan, interest rate and whether you can make additional repayments and the conditions attached. You can opt for a U.S. Department of Agriculture (USDA) Rural Development home loan which is perfect for smaller, rural, or suburban homes. A USDA loan is more flexible on interest rates and does not require actual down payments. You have to meet certain requirements to be considered eligible for a USDA loan. You can check the USDA eligibility map 2020 to determine if you are qualified for this loan. Also, find out about other costs such as stamp duty, insurance and legal fees.
There are two interest rate options; fixed and variable. Discuss the options with your financial advisor to determine which will suit you best. Although the minimum required deposit amount for a home loan is 10%, banks generally expect a 20% deposit. Be sure to discuss this with your lender and have enough money at your disposal.
5. Pre-Purchase Building Inspection
If you’ve selected a house and have a mortgage organized, don’t sign the contract just yet. Arrange for a pre-purchase building inspection to check the property for structural defects and pests such as termites and rodents.
However, this may not be necessary if you’re buying a newly built home. The reason being, all houses are inspected at various stages during the construction process. If you opt to get a house and land package in Perth where the builder begins construction after you sign the contract, you can hire an independent inspector to monitor the construction.
For peace of mind, you can discuss the best action to take with your agent.
6. Preparing To Purchase
Once you have everything else in place, you can proceed to sign the contract. Read the contract in detail with your solicitor and make sure all the details are correct. If you’re building a house, check that the construction timeline is properly stated as well.
After you sign the contract, it’s time to finalize your mortgage and pay the stamp duty. You should also take building insurance on your home as required. It generally takes six weeks for the lender to transfer your money to the seller, but it can vary.
7. Settlement And Handover
When the settlement is complete, the seller will hand you the key and your new home is ready for you to move in. You should also receive any necessary documents such as the certificate of compliance and completion. If your house is newly built, do a detailed check for surface and fitting defects so you can fix them while your home is still under warranty.
Now you’re ready to furnish your house and begin a new life! At First Home Builders Direct, we want new home buyers to be able to own a home, and are always ready to help. If you need assistance finding the right house, don’t hesitate to get in touch with us.