Your guide to buying your first home like a pro
Thinking of buying your first home? It's a joyful time in your life but can often be an overwhelming move. Kellaprince Properties knows there's much to consider; our guide covers the home-buying benefits, risks, and process to help you take your first step on the property ladder confidently.
Pros of buying your own home
Whether you're living with family and want your own space or wish to move from renting to buying, homeownership is a great decision.
Build your wealth: Your home will often be the most valuable asset you have. Over time, it will increase in value, helping you earn a profit if you decide to sell at a later stage. You can even enter the buy-to-let market and become a landlord.
Draw from home equity: You can leverage your home equity and access it by redrawing on your loan or borrowing on top of your equity. With these funds, you can buy a new car, furnish your home, or go on holiday.
Enjoy living security: Owning your home gives you peace of mind as you won't have to deal with an untimely lease termination. You can also avoid any rent agreement renewal hassles or having to negotiate your rental price.
Create your own space: Have the freedom to alter your property whether it's changing the landscape, renovating, or adding decor updates that match your unique style.
Boost your credit score: Paying your home loan repayments consistently will also boost your credit score. This is helpful if you plan on taking future loans for additional assets.
Leave a legacy for your children: Once your home is paid up, you will always have a place for you and your family to call your own. Plus, you can will it to them, ensuring they have a head-start in life.
With so many positive effects, there's every reason to get on the property search. However, it's important to be aware of the risks and ways to mitigate them.
Dealing with the risks of buying property
While homeownership is generally a sound financial decision, you need to be aware of the pitfalls when buying property. Here are the risks you should prepare for:
The major risk is a financial one. Being unable to pay your monthly home loan each month, whether due to poor budgeting or factors out of your control, can tarnish your credit score and your investment.
- Tip: Budget carefully and save up to prepare for unexpected events. You can also sign up for a home loan prevention plan to cover your payment in the event of death, disability, disease or loss of income.
Then there's the danger of paying more than you need to. The property market goes through peaks and valleys and you may fork out more on a property at a time when interest rates are too high or buyers are at a disadvantage.
- Tip: With the help of an experienced property practitioner, you can pinpoint the right investment.
A poor location can make it difficult to sell or let out your home in the future. It will also impact the quality of your life.
- Tip: Read area guides, reports, and news articles on your chosen area. A local area expert can also give you insight if the area matches your needs.
When buying a home, it's important to choose one without significant property defects. This can increase the price of the property as you scramble to fix any issues.
- Tip: You must have a professional building and pest inspection done before you buy. This will help you see if the property has any serious concerns.
As a tangible asset, your property is vulnerable to damage. This can be from theft, fire, floods, negligence, or even unexpectedly like a burst geyser.
- Tip: Constant maintenance and upkeep are important. You can also install safety features on your property and take out a homeowner's insurance policy.
With the guidance of a property practitioner, you can ensure your real estate experience is a pleasant one. Besides helping you find your ideal home, they can provide advice to get the most out of your new home.
Process of buying property
Like all investments, buying a home is an extensive undertaking. However, understanding the journey and its requirements can ensure you have as effortless an experience as possible.
Step 1 - Improve your credit score: If you're applying for a home loan, it pays to work on your credit score. This will help you get a favourable mortgage and refinancing rates on your loan.
Step 2 - Evaluate your finances: Ensure you're prepared to meet the costs of property ownership such as deposits, transfer duty, transfer costs, bond registration, and more. Getting pre-qualified for a home loan is also important as some sellers won't consider you without this.
Step 3 - Partner with a property practitioner: With the help of an experienced property professional, you can find a home that meets your unique needs. They will also help you during the crucial negotiation period.
Step 4 - Pinpoint your perfect home: Once you're ready, check out areas of interest and visit properties that hold potential.
Step 5 - Sign an offer to purchase: You've found your home. Great! Now you can sign an agreement between you and the seller that outlines the terms and conditions of the property sale.
Step 6 - Get a home inspection done: Hire professionals to check for any structural damage and defects. This will help prevent any heartache and extra repair costs at a later stage.
Step 7 - Apply for financing: If everything is in order, you can apply for a home loan or a Finance Linked Individual Subsidy (FLISP) if you meet the criteria.
Step 8 - Navigate the registration and property transfer: Involving different attorneys, it can take up to three months to transfer ownership of your new home.
Step 9 - Enjoy your new home: When the transfer has been finalised, you can move into your property. Take time to clean, organise your belongings, and make your space feel like your own.
Buy your first home with us
Getting the keys to your first property is an exciting experience. Kellaprince Properties has expert property practitioners who can help walk you through the entire process successfully. View our properties for sale and contact us today.
20 Jun 2022
Author Kellaprince Properties