The hardest part of climbing the property ladder is often getting on that first rung.
It’s equal parts exciting and overwhelming as you take that first step, and any uncertainty can be intensified by Melbourne’s fiery property market.
While housing prices have jumped 15 percent in our city this year, there is still ample opportunity for first home buyers, with interest rates at record lows and governments rolling out various incentives.
There are also other proven ways to start your property journey.
Budget and save a deposit
Jokes about giving up avocado toast aside, it pays to set a savings goal early and stay disciplined.
Domain’s most recent First Home Buyer Report reveals it takes about six years for the average first home buyer couple to save a 20 percent deposit for an entry level house, so the sooner you start the better.
Understand the costs and how home loans work
It’s crucial to know where the goal posts are as you strive to save your deposit. You should also be able to account for stamp duty, legal fees and other costs that come with buying property and holding a mortgage.
Be sure to research what home loan structure is best for you. A fixed rate works for those who want interest rates and repayments locked over a particular period, while others prefer a variable interest rate home loan which can change with the market.
Tap into government support
First home buyers may be eligible for the federal government’s First Home Loan Deposit Scheme, the Victorian Homebuyer Fund or various other stamp duty concessions or incentives.
Capitalising on these schemes could help you get a foot in the door earlier and save you thousands of dollars.
Research where you’d like to live
You may love the suburb you grew up in or the trendy area your friend lives in, but you need to ensure it is the best fit for this stage of your property journey.
Research potential suburbs and explore their connections to transport, shops and schools. Reach out to real estate agents in the local area for advice.
The suburb you love may be out of reach, but that doesn’t mean you need to compromise your lifestyle completely.
Rentvesting is where you buy an investment property to rent out in an area you may not want to live, as you rent in a location you like.
Pool your resources
Joining forces with a sibling, partner or friend who can contribute equally to a deposit and mortgage repayment could help boost your borrowing power.
While there is power in numbers, it’s vital you seek legal advice to ensure the arrangement protects both parties.
Lastly, be patient and enjoy the experience
Purchasing your first home marks one of life’s biggest milestones, so be proud of your hard work to get here.
For more advice and guidance on finding your first home, contact the experts at Noel Jones.