Managing your finances is key to buying your first home with confidence
Establishing a budget and managing your finances should be top of mind when deciding to purchase your first home. The better prepared you are, the smoother the process will be. Below are some of the key questions answered.
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How do I plan a budget?
Budgeting is fundamental to purchasing your first home, so it needs to be carefully considered and as accurate as possible.
There are five essential steps that are common to every well-planned budget:
- Make a list of how much you’re earning and the frequency of your income.
- Add up every expense you can think of – from utility bills to groceries, entertainment, transport and beyond.
- Considering the above two points, determine how much can you save whilst maintaining a standard of living you are comfortable with. Work this out and then set yourself a hard spending limit.
- Finally: Set yourself a regular review period to track and reconcile your budget vs your spending. Monthly check-ins are ideal.
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How much deposit do I need for a home loan?
Before providing you a loan, most banks and lenders need you to pay a portion of your new home’s cost as a deposit.
The amount required will be formed once the lender has reviewed your financial profile, as well as other factors such as the market conditions and their own internal criteria. This can attract extra fees such as Lender’s Mortgage Insurance. Speak your broker or bank to help work out what’s best for you.
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How do I get a home loan?
When obtaining a home loan, here are some important points to factor in:
- Be gainfully employed.
- Demonstrate a strong savings or repayment history.
- Ensure your credit rating is as sparkling as can be.
- Consider minimising any unnecessary financial commitments, like pay later services.
- Show that you have a financial safety net, e.g. a ‘rainy day’ fund.
- Avoid applying to too many lenders at once and make sure you’re disclosing everything you need to as part of the process.
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What financial help is available?
There are a number of federal and state government initiatives available to First Home Buyers that can help ease you into your new home.
To help you get started, we’ve summarised some of the key government grants and initiatives available for you to explore at a federal level, as well as state offerings across NSW, Queensland, Victoria and WA. Your financial advisor may be able to help you determine if you’re eligible for one.
Set yourself up for success
Know what you need
Like many first-home buyers, you may be transitioning from renting. This can give you a good idea of what you want from your home and surrounding community - but what do you need? Buying a home is an investment in your future, so it’s important to consider what you need now and what you might need in the future. A big part of this is considering what will you be able to afford today, as well as planning for the future. These are vital considerations when approaching your bank or lender for a loan.
Get help if you need it
There are many lenders to choose from, and you may want to consider working with a mortgage broker to help find loan options. It’s important to do your due diligence to source a savvy broker that’s right for you. You can check if a broker is properly licensed here. They’ll consider your needs, work out how much you can afford to borrow and find the loan best suited to your goals. They’ll also manage the whole process from application through to settlement for you.
Get pre-approval to buy
Whether you have a broker on hand or are heading directly to the bank, getting a pre-approval is an important step in the journey. This is where a lender will review your financial profile, consider any grants you may be eligible for, outline applicable fees and assess your ability to repay the loan. A pre-approval will help you set an affordable price range as you start to consider your home options.
Start your search
You’ve got your budget and can now start looking at home options with confidence. Whether you’re creating a comfortable haven just for you, or setting down roots with a growing family, we can help you find the right community and home type to fit your needs. Visiting a Stockland display village is a great way to experience first-hand what option suits you, meet with potential builders and get a feel for the community.
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This website is supplied for the purpose of providing an impression of Stockland Communities and the approximate location of existing and proposed third party infrastructure, facilities, amenities, services and destinations, and is not intended to be used for any other purpose. All details, images and statements are based on the intention of, and information available to, Stockland as at the time of publication (May 2024). Product availability may vary and change due to future circumstances. This website is not legally binding on Stockland. Stockland does not give any warrant in relation to any information contained in this website. Stockland does not accept any liability for loss or damage arising as a result of any reliance on this website or its contents. All distance and travel timeframe references are estimates only, refer to distance by car or driving time (unless specified otherwise), and are based on information obtained from Google Maps at the time of publication (May 2024).