Buying your first home
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Buying a home is a significant milestone, especially for South Australians buying their very first home. It’s one of the most important financial decisions you’ll make in your lifetime, so doing your research and being prepared is crucial.
With everything you need to consider – from determining how much you can afford, to saving a deposit to choosing the right home – it can seem like you’re riding a rollercoaster! Here are some handy tips to help you on the path of becoming a home owner.
More help for home buyers
The HomeSeeker SA website is a reliable source of information about buying an affordable home as well as providing listings of fixed price, affordable homes currently for sale.
The South Australian and Federal Governments have some helpful measures to assist eligible buyers to buy an affordable home - which can add up to tens of thousands of dollars in direct and indirect financial assistance. You can read more about these measures on this website.
When it’s time to start seriously thinking about buying your affordable home, money should be your first consideration – and by money we mean the finances you’ll need to become a home owner such as saving for the all-important deposit to get you underway.
And it’s not just the upfront cost of buying your new home, it’s also the money you’ll need to cover the other fees and charges associated with the home-buying process as well as the ongoing costs of being a home owner (insurance, maintenance, council rates, etc).
Carefully consider how much you can afford. Think about your income, your current debts, your bills, and potentially how much you’ll be paying every month in mortgage repayments. This can help to narrow your options and make sure you don’t overstretch yourself financially.
Deposit and home loan
You’ll need a deposit – which, depending on the bank, financial institution, or government loan scheme that you’re dealing with, could be between 2% and 20% of the full purchase price of your home. Saving for a deposit can be the biggest hurdle many people need to overcome to buy their first home. Some banks and other commercial lenders offer low-deposit loans, so shop around.
The South Australian Government’s home lender HomeStart provides home loans for South Australians and has a range of loans available – including low deposit loans and shared equity financing for eligible home buyers. Visit their website to find out more.
Most people don’t have the funds available to buy a home outright and need to borrow money from a bank or other financial institution. ‘Pre-approval’ of such a loan is an important step towards home ownership. While this doesn’t commit you to taking out a loan, it does show that you’re eligible to borrow up to a certain amount. Pre-approval usually lasts for up to three months and having pre-approval for a loan is a great start when you register your interest in a fixed price, affordable home.
The right home
With your finances sorted, the next step is to find the right home. Again, there’s a lot to consider including location, your price range, whether you want to undertake any renovations, whether you’re planning to expand your family – even whether you want to buy an established or new home.
When it comes to choosing the right home, a great tip is to make yourself a couple of lists – the things that you ‘must’ have (such as nearby schools, shops, public transport) and the things that would be ‘nice to have’ (such as fittings, outdoor space). These lists can really help you settle on the type of home and location that you’re looking for.
When you identify some homes that might be suitable, go and have a close look at them – through open inspections, or by arranging a visit through the selling agent. This can be another daunting step along the path to first home ownership, but there are a couple of things you can do to ‘ease the pain’ and make sure you’re getting value for your money. Don’t just wander through the property – give it a thorough inspection!
Organise an official building inspection to check for any potential maintenance issues (e.g., cracks in walls, mould) and check out the location to make sure your potential new street and suburb has everything you’ll need – public transport, schools, shops, parks, medical facilities, etc. With any luck, being thorough now could help to avoid any nasty surprises after you’ve bought the house.