There is nothing like the feeling of owning a home, but the process of getting there may feel daunting the first time.

Here’s a breakdown of how to get on the pathway to purchasing your first home in 2024.

Be prepared

The first step in buying a home, whether it’s your first or your fortieth, is to get your finances in order. You need to know how much you can afford to borrow and how much you can pay towards the deposit.

You’ll need to bring an expert on board, but the good news is you don’t have to spend money at this stage. Mortgage brokers help connect you with lenders that will approve a loan at a competitive rate. They will either charge you a very small fee or nothing for this service.

Your mortgage broker will give you an idea of how much you can borrow based on your savings and income, and work with you to get pre-approval from a lender. Pre-approval is not essential to
buying a home, but it will help you research what’s available and place bids with confidence. Once you have made an offer, you can reconnect with your broker to finalise your loan.

The pre-approval process can be involved in itself, but your broker can tell you how to be prepared. Be aware that you will need a few weeks or even months to confirm pre-approval, and that it’s not advisable to put down a deposit for a home unless you have it.

House hunting

With your finances sorted out, you should now have an idea of your budget for a home. You need to shop within this range.

Along with shopping within your price range, you should also allocate your must-haves, want-to-haves, and bonuses. These are the three levels of what you are looking for in a home. Must-haves are things you cannot do without, like the number of bedrooms you need. Should-haves are less necessary but are something you will do very favourably in a home like air conditioning or undercover parking. The bonuses are things like a swimming pool that are not necessary but will sweeten the deal if a home is in your price range.

The best way to successfully house hunt is to get to know some local real estate agents and work with them to find the right property for you. Agents are looking to match buyers with the right property so don’t be shy about having some honest discussions about what you’re looking for and what you can afford.

Check for grants

Talk to your mortgage broker or real estate agent about what grants and incentives are available when purchasing your home.

States will have their own first home owners grants worth looking into, but keep an eye out as well for the Federal Government’s Help-to-Buy Scheme, which will benefit many first-home buyers across the country.

In this scheme, the government will contribute as much as 40 per cent of the value of a home as a sort of co-buyer. Depending on your income, you may also be eligible to pay as little as a two- percent deposit. Saving the full 20 per cent deposit that most vendors require to buy a home is very difficult in the current cost- of-living crisis, so any way to reduce your deposit can be helpful.

You don’t need to pay any rent on the Government’s portion of the loan, but you must be aware that they will own a percentage of your home, leaving you with less when you sell.

Again, your broker is a good port of call to explore the grants available.

Start small

If you’re struggling to find a house in your price range, think outside the square and look at smaller apartments. As you pay down your loan and experience an increase in value, you’ll end up with more to spend on your next home.

There are also the options of ‘rentvesting’ and buying with a friend or family member so you can spend less but get your foot onto the property ladder.

Getting ready to buy your first home? Get in touch with your local Professionals representative today.