This is such an exciting time for everyone. Buying your first home will be stressful, exciting and expensive. But usually, it’s all worth it.
Know what you can borrow
How much you can borrow will depend on several factors, namely how much deposit you have, your income and any other debts or assets in your name. In some cases, where you do not have a 20% deposit for example, you will need to take out Lenders Mortgage Insurance. Mortgage insurance is simply a guarantee to the lender and protects against the investment. If the home was ever sold for less than the lender is owed this insurance will protect the lender. It does not protect you unfortunately but it does prevent further financial problems.
Understand the type of loan you want
Fixed rate, variable rate, low doc loans… there are so many different types of loans available but for your first home, just keep it simple. Do some research of your own, visit your chosen lender or mortgage broker, and talk to family and friends. Generally speaking, if interest rates look set to rise, then it might be worth fixing your loan rate. If rates are looking steady or there is possibility of rates being lowered, then you might be better to stick with a variable rate. But it really depends on what is being offered to you by the lenders, and whether you have a deposit or are taking out mortgage insurance.
Settling into your new home
Once settlement date is agreed, you can start making plans. You will need to organize a pest and structural inspection, and your contract of sale will probably be subject to this being completed. Further down the track, usually, a few days before you get the keys to your new home you are offered the chance to visit the property one more time and carry out a final inspection. This is where you check the gas/electric/water is all in working order. By now you have hopefully booked a moving van and are redirecting your mail. Once you settle into your new home, be sure to keep on top of your mortgage so you always know where you stand financially.
This post was inspired by Genworth Financial. All opinions are 100% my own (always). For more information about caregiving, visit the Genworth Financial website.