All You Need To Know About Buying Your First Home
5 MINUTE READ
1. Deposit
First Home Owners have an advantage over most investors on this front, depending on the borrower, lenders have anywhere from 2%, 5%, 10% deposit requirements.
There are other factors here that determine the deposit requirement, be sure to speak to the IGM Team to find out more.
2. Borrowing Capacity
Lenders determine your borrowing capacity by a simple formula.
Your net income minus your calculated expenses provide a net figure which the banks use to determine what sized loan you can afford. Different lenders will have different buffers and other policies which affect the loan amount they will deem affordable.
3. Best Fit Loan
4. Pre-Approval
Your IGM Broker and lending associate will work with you to get you the right preapproval.
The process will differ from lender to lender but generally requires lending conditions to be met before the issuance of a pre-approval. Note, as, with every conditional approval, the lender will have to review the chosen property and determine it is acceptable security.
5. Find Your Home
Once you have obtained a pre-approval and are comfortable with the conditions, the bank has confirmed your deposit and servicing capacity, you’re now best equipped to find your home.
There are many things to consider; what you need, what you want (different priority where a need heavily outweighs the want) and your price and budget.
There are different avenues as to how you go about this, but our team can assist here, being licensed real estate agents, and having connections to buyer’s agents who will help source the right property for you.
6. Purchase Your Home
Via Auction or Private Treaty,
Contracts & Other Requirements
Purchasing a home can take place in a few ways.
Auction, where having the highest acceptable bid means you beat out other prospective buyers to land the property in an auction environment. Usually a 10% deposit is required, with a non-cooling off period. In this situation, having an experienced buyers agent can give you the edge against other buyers.
Private Treaty, where via the process of a marketing campaign you put an offer which is accepted by the Vendor. In that contract, a deposit is required, gives you a cooling off period (most states/territories) to speak with your lender and ensure it is an acceptable security. The Vendor (Seller) will provide a Contract of Sale. A conveyancer or Solicitor is recommended to review the contract before signing, as there may be clauses or issues within the contract in regards to the property.
We also recommend Building and Pest Inspection reports prior to making an offer at auction/private treaty to ensure any issues are known upfront and factored into your decision making. Once done, make an offer!
7. Settlement
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