House Buying Tips for Beginners Part 1: Three Steps to Start your Journey

Buying your first home is an exciting milestone, but it can also feel overwhelming. From understanding your finances to figuring out what to look for in a property, there’s a lot to consider. That’s why we’ve broken the process into three easy-to-follow steps to help you prepare before you even start viewing homes. Whether you’re ready to dive in or just starting to explore the idea, this guide will equip you with the knowledge and confidence to make informed decisions and get your journey off the best start.

So, let’s get started with three essential steps every beginner should take before embarking on their home-buying journey.

@moovetokHouse Buying Tips for Beginners - Before attending any property viewings, make sure you’ve completed these 3 essential steps: 1. Assemble your team - You need a financial advisor & a 'buying buddy' (parent, close friend or partner) to help with the process. 2. Know your numbers - What can you borrow vs what can you really afford 3. Get your shortlist - What matters most? Parking? Internet? Area? These are the essential steps every first-time buyer should take before viewing a home. 📲 Like and follow for PART 2 - How to nail your property viewings! #FirstHomeBuyer#HouseBuyingTips#BuyingAHouse#PropertyAdvice#HomeBuyingJourney #MortgageTips#BeginnerPropertyTips #HouseBuying

Step 1: Assemble Your Team

Buying a house is not something you’ll do alone. It’s a complex process that involves multiple professionals, and assembling the right team early can make things smoother and less stressful. By the end of your journey, your team might include conveyancers, surveyors, and possibly others, but for now, as a beginner, you only need to focus on two key roles: your financial broker and your buddy. Getting these two roles in your team early helps you avoid any mistakes and time wasted further down the process.

Role 1: A Financial Broker also known as a Mortgage Broker

One of the first and most important steps in buying a home is understanding your financial position and understanding what you can potentially borrow. While you could go directly to a bank to inquire about mortgage options, this approach has a significant limitation: the bank can only offer you their own products.

A Mortgage broker on the other hand, has access to the wider market. They are professionals who specialize in finding the best mortgage deals tailored to your specific circumstances. Here’s why a financial broker is invaluable, especially for first-time buyers:

• Comprehensive Market Scan: Brokers evaluate a range of lenders to find options that suit your financial situation.
• Expert Guidance: They can guide you through the application process and explain any confusing terms or requirements.
• Tailored Solutions: If your financial circumstances are less straightforward (e.g., you’re self-employed or have a lower credit score), brokers can identify lenders that are more flexible.

While some brokers charge a fee for their services, the value they provide often far outweighs the cost. They can save you time, money, and potential headaches down the road. Just be sure to ask upfront what their charges are so you have no surprises down the road.

Role 2: A Buddy

Buying your first home can feel overwhelming, and there’s a good chance you’ll overlook certain details. That’s where having a buddy comes in.

Your buddy could be a parent, friend, or colleague who has experience with buying property. Their role is to offer a second opinion, ask questions you might not think of, and help you avoid common pitfalls. For example, they might remind you to consider practical factors like parking availability, internet connectivity, or the reputation of the local area, things that may not immediately come to mind as a first-time buyer.

Having someone by your side who has been through the process before can be incredibly reassuring. They can provide advice, support, and a fresh perspective, helping you make better decisions along the way. If you are unsure its better to have a trusted buddy rather than just struggle alone and potentially make a mistake.

Step 2: Know Your Numbers

Before you start dreaming about your ideal home, it’s crucial to understand your budget. Knowing how much you can borrow and what you can realistically afford will help you narrow down your options and avoid financial stress or crushing disappointment later.

Question 1: How Much Can You Borrow?

This is where your financial broker comes into play. They will assess your income, expenses, and overall financial situation to determine how much lenders are likely to offer you. Factors they’ll consider include:

• Your Income: The higher your income, the more you may be able to borrow.
• Your Expenses: Lenders will evaluate your monthly outgoings, including debts, bills, and other financial commitments.
• Your Deposit: The size of your deposit will directly impact how much you can borrow. A larger deposit not only increases your borrowing power but may also give you access to better interest rates.

Your financial broker will compare options from various lenders and present you with the best deals available for your personalised circumstances. This step is essential because it ensures you have a realistic understanding of your borrowing capacity before you start looking at properties.

Also, some sellers will expect you to have understood your budget before viewing their property as they want to ensure they don’t waste their time with buyers who are not eligible to purchase their property due to lack of finances. Having done the work beforehand ensures you can answer any questions from sellers with confidence quickly, and move faster to the viewing stage.

Question 2: What Can You Afford?

Just because a lender is willing to offer you a certain amount doesn’t mean you should max out your budget. It’s important to consider what you can comfortably afford, not just today but also in the future. Here are some key factors to think about:

• Monthly Payments: Make sure your mortgage payments fit comfortably within your monthly budget. Remember to account for other expenses, such as insurance, utility bills, and maintenance costs.
• Interest Rate Changes: If you’re on a variable-rate mortgage, your payments could increase if interest rates rise. Plan for this possibility to avoid financial strain.
• Job Security: Consider your current job stability and future earning potential. If your circumstances were to change, could you still afford your mortgage payments?

Being realistic about your affordability is crucial. Overstretching your finances can lead to stress and difficulties down the line, so it’s always better to err on the side of caution.

Step 3: Create Your Shortlist

Now that you’ve assembled your team and established your budget, it’s time to start thinking about what you’re looking for in a home. Creating a clear and detailed shortlist of your needs and wants will help you focus your search and make the process more efficient.

Define Your Priorities

Every buyer has unique circumstances, so it’s important to think about what’s most important to you. Here are some questions to guide your thought process:

• Location: Do you need to be close to work, schools, or public transport? What’s the local area like in terms of safety, amenities, and community?
• Size: How many bedrooms and bathrooms do you need? Do you require extra space for a home office or storage?
• Parking: Is having a garage or off-street parking essential?
• Internet and Utilities: What’s the internet speed like in the area? Are there reliable utility providers?
• Future Growth: Will the property suit your needs in the long term? For example, are you planning to start a family or work from home more often?

Differentiate Between Needs and Wants

It’s important to distinguish between features you absolutely need and those that would be nice to have. For example:

• Needs: These are non-negotiable, for instance, if you work remotely, a good internet connection is a must.
• Wants: These are desirable but not essential. For instance, a south-facing garden or a walk-in closet might be nice, but they shouldn’t be deal-breakers, unless you love gardening that much.

By clearly defining your priorities, you’ll be able to focus on properties that meet your core requirements while staying flexible about less critical features.

Use Your Buddy’s Perspective

This is where your buddy’s input can be especially helpful. They might think of things you haven’t considered, such as proximity to local facilities, the reputation of local schools (even if you don’t have children yet), or potential resale value. Having someone to bounce ideas off can help you refine your shortlist and ensure you’re making well-rounded decisions.

Putting It All Together

Before you even start viewing properties, it’s crucial to lay a solid foundation. Hopefully this guide has helped you prepare yourself for what is an exciting, yet full on journey. Let’s recap the three steps:

Step 1 Assemble Your Team:

• Find a reliable financial broker to guide you through your mortgage options.
• Choose a buddy to provide advice, support, and a fresh perspective throughout the process.

Step 2 Know Your Numbers:

• Understand how much you can borrow by working with your financial broker.
• Assess what you can realistically afford, considering your current and future financial circumstances.

Step 3 Create Your Shortlist:

• Identify your needs and wants, focusing on what’s essential for your lifestyle.
• Factor in location, size, amenities, and long-term suitability.
• Leverage your buddy’s experience and insights to ensure you’re considering all angles.

These steps will not only help you feel more confident as a first-time buyer but also ensure you’re well-prepared when it comes time to start viewing properties.

Bonus Tips for First-Time Buyers

While the three steps above are essential, here are a few additional tips to keep in mind as you navigate the house-buying process:

1. Do Your Research

Take the time to research the property market in your desired area. Look at average house prices, trends, and the types of properties available. This will give you a better understanding of what to expect and help you spot good deals when they arise.

2. Be Patient

Finding the right property can take time, so don’t rush the process. It’s better to wait for a home that meets your needs and budget than to settle for something that doesn’t feel right.

3. Plan for Additional Costs

Buying a house involves more than just the purchase price. Be prepared for additional costs, such as:

• Stamp Duty (if applicable): Taxes on property purchases, which vary depending on the price of the home and government policies.
• Conveyancing Fees: Legal costs associated with transferring property ownership.
• Surveyor Fees: Costs for inspections to assess the property’s condition.
• Moving Costs: Expenses for hiring movers, renting a van, or purchasing packing materials.

Having a clear picture of all potential costs will help you budget more effectively and avoid unexpected surprises.

4. Think Long Term

When purchasing your first home, think beyond your immediate needs. Consider how the property will serve you in the coming years. For example, if you’re buying a home as a single person but plan to start a family soon, you might want to prioritise extra bedrooms or a family-friendly neighbourhood.

5. Stay Organised

Buying a house involves a lot of paperwork and communication with various parties. Keep all your documents, emails, and notes in one place to stay organised and ensure you don’t miss any important deadlines.

What’s Next?

Once you’ve completed these three preparation steps, assembling your team, knowing your numbers, and creating your shortlist, you’re ready to move on to the exciting part: viewing properties!

In Part 2 of this series, we’ll dive into the viewing process, covering everything you need to know about assessing a property in person and asking the right questions. We’ll also share tips on how to identify potential red flags and make the most of your visits.