One of the most exciting times in your life, and one which you will remember forever, is buying your first home.  It is quite often a purchase which stirs up all types of emotions and feelings ranging from excitement and anticipation to inadequateness, anxiety and fear. At bytherules, we know how you feel, because we’ve all been there.


It’s important to hear stories and be guided by people you trust who have been through the process themselves, whether it be your parents, grandparents, good friends or a mentor.


It’s also a good idea for you to do your own research, know what you’re looking for and how much you can really afford to borrow. Although mortgage brokers and bank managers won’t usually lend you more than you can handle, there’s nothing worse than realising in 6-12 months’ time that you’ve gone way in over your head in debt.


Here’s four ways to ensure you ‘keep your head’ and don’t fall into the trap of an over-emotional house buy.


#1   Save Save Save for a House Deposit

The first step is to ensure you are actively saving money for a deposit. Every dollar helps. Do a budget to identify how much you can afford to save, and be scrupulous.  A great savings goal for a house deposit is 20% of the purchase price, but it’s even better if you can save more, to cover buying costs and give you more borrowing power.


It’s a good idea to open up a dedicated savings account and set up an automatic transfer from your general account where your wages go, into this account.  Transferring 10% of everything you earn is a great start, then as this gets easier (believe us it will), you can transfer more.  It is exciting watching it grow and will become a habit which you won’t want to break.


#2   What Can You REALLY Afford to Borrow?

It’s very important to get realistic about what repayments you can really afford. When you’re looking to borrow money, remember it’s for a long time, sometimes up to 25 or 30 years! During this time, there will be a lot of changes in your life and the interest rate you pay today will probably not be the same rate in 5 years, or even 2 years.  So, whatever you do, make sure you give yourself plenty of breathing room. Perhaps ask yourself, ‘could I pay double that?’ and therein might be your answer of how much you can be comfortable with borrowing.


How much you can afford to borrow depends on your income and financial commitments, how much you’ve saved for a house deposit, your credit rating, and whether you have a ‘guarantor’.


To help you Boost Your Borrowing Power, CLICK HERE to read our blog with 5 Tips from Lenders.


#3   Hone in on a ‘Best Rate’ Home Loan 

The interest rate on your home loan can make a big difference to how much you need to repay. A rate of even .25% lower could save you thousands of dollars over time.


A good, reliable mortgage broker is a sensible place to start looking for a ‘best rate’ loan, as they are ‘in the game’ and can provide a range of up-to-date loan options for you.


Once you’ve chosen a home loan mortgage option, we recommend you applying for loan pre-approval. This means that you will have the ability and confidence to act promptly on a property, especially if you are planning to attend an auction.


#4   Go, Seek, and You Will Find

In the whole process of buying your first home, researching and looking at homes is often the most exciting, but it can also cause stress and anxiety. Take a deep breath, know why you’re buying, document your ‘must-haves’ and ‘nice-to-haves’, and be strict on staying within your price range.


The more you research, explore and attend property inspections, the more educated and confident you will feel. You may find that, along the way, you will need to change the goal posts in terms of your ‘must-haves’ or where you want to buy, and that’s okay. Just keep going – the right one will eventually come along, and it will have your name on it.


At bytherules, we make the conveyancing for your home simple. For Quick-Reference Guide to the Conveyancing Process, CLICK HERE.


If you would like us to look after you through your property transaction, simply request a quote using our easy online form, or call us on 1300 22 33 44.