All You Need To Know About Buying Your First Home

All You Need To Know About Buying Your First Home

5 MINUTE READ

Buying a home is one of the most exciting times, regardless of what stage you are in life.
It may seem like a complex process, and like everything else in life, the more experience you have doing something the easier it gets/becomes like second nature. Our team at IGM have been settling hundreds of loans a year so this is something that we definitely have plenty of experience in.
We’ve put together an easy step by step guide below, which we are always happy to help go through with you.

1. Deposit

What do I have to contribute to the purchase?

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

What can I afford?

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

IGM Finding you the best fit lender for your unique circumstance.
Working together with your broker, your unique position will determine the best fit loan. As best practice, we will run through options with you ensuring the final proposal is communicated to you in an understandable manner that has your best interest as the basis.

4. Pre-Approval

The bank will support you conditionally.

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

Looking for a home, on market, off-market

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

Property is legally transferred into your ownership.
The lender will help you fulfill your obligation to pay the Vendor, where your mortgage begins and its at this stage congratulations are in order as you officially own your home, with the title transferred in your name. We know it was an exciting and at times anxious journey – with a lot of unknowns – that’s why having the team at IGM at your side gives you every advantage possible.

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