December 2022 - Noel Jones

Buying a home for the first time can be a daunting experience, especially in a country as expansive and diverse as Australia. However, with the proper preparation and research, it is possible to find the perfect home for you and your family (and at the right price, too).

In this article, our team at Noel Jones have offered some tips for every first-home buyer to navigate the new houses for sale in Melbourne’s eastern suburbs.

Understand the necessary upfront costs

Before you start looking for a home, take the time to understand the costs involved in the purchasing process. This includes:

Deposit: The size of your deposit will depend on the type of property you are buying and the lender you are using, but it is typically around 20% of the purchase price.

Legal & conveyancing fees: Legal fees can also vary given the workload around the settlement process, but you can expect to pay around $1,000-$1,500 for conveyancing services.

Stamp duty and administration fees: Stamp duty is a tax that you need to pay when you buy a property, and the amount will depend on the value of the property and the state or territory in which you are buying.

Lender’s mortgage insurance: If you’re deposit is less than 20%, most lenders will require this insurance as additional loan protection, especially when buying a home for the first time.

It is important to budget for these upfront costs and save as much as possible before you start negotiating with multiple real estate agents representing the new houses for sale in Melbourne’s eastern suburbs.

Be prepared to meet your ongoing financial obligations

Owning a home also comes with ongoing financial obligations, such as mortgage payments, insurance, and maintenance, and you will need financial stability in place to cover them.

Your mortgage payments will depend on the size of your loan and the interest rate, and it is essential to shop around and compare different lenders to find the best deal. You will also need to take out home and contents insurance to protect your property and belongings, and you should budget for regular maintenance and repairs.

Know the power of your credit score

Your credit score is a critical factor when it comes to getting a mortgage, as it tells potential lenders how financially responsible you are – and, as such, whether it is a sound idea to offer you a loan.

A higher credit score can also make it easier to obtain a loan and may also result in a lower interest rate. Before starting the home-buying process, check your credit score and address any issues affecting it. This can include paying off any outstanding debts (such as credit cards and personal loans), correcting any errors on your credit report, and consolidating multiple loans into one to ensure payments are never forgotten.

Work out your borrowing capacity with the bank

It’s unlikely you will have the cash available to purchase the property outright, so you will need to know how much you can afford to borrow before you start reviewing the new houses for sale in Melbourne’s eastern suburbs.

You can use online mortgage calculators or speak to a financial advisor or lender to work out your borrowing capacity. Keep in mind that the amount you can borrow will depend on your income, expenses, and the size of your deposit. A key piece of advice for each first home buyer is to be realistic about what you can afford and not stretch yourself too thin.

Research ideal property locations

Australia is a vast country with a range of different property markets, and it is important to research different locations to find the one that is right for you. Consider factors such as the cost of living, employment opportunities, schools, and transport links. It may also be worth looking into any potential growth areas or suburbs/cities expected to appreciate in value over time.

Review any financial assistance available

There is a range of financial assistance options available to first-time home buyers in Australia, including the First Home Owner Grant, the First Home Guarantee, and the First Home Super Saver Scheme. These schemes can help to reduce the upfront costs of buying a home and make it more affordable. It is worth reviewing these options and seeing if you are eligible to take advantage of them.

Receive More First Home Buyer Advice from Our Specialists at Noel Jones

For further first-home buyer advice, or information on the new houses for sale in Melbourne’s eastern suburbs, please feel welcome to contact our team at Noel Jones today.