10 Steps To Buying Your First Home

Buying your first home is a significant milestone, and it's essential to approach it with careful planning and consideration.  Here are the steps you'll typically go through when purchasing your first home, along with some information on government grants that may be available to you

  1. Assess Your Finances: Determine how much you can afford to spend on a home. Consider your income, savings, expenses, and existing debts. It's crucial to have a clear understanding of your financial situation before you start house hunting. We recommend you do a budget to see what surplus money you have available.
  2. Create an emergency fund of $2,000 and  cash reserve of 3 to 6 months worth of living expenses. This will act as a buffer in the event of an emergency or loss of income. 
  3. Save for a Deposit: Start saving for a deposit  which is typically a percentage of the home's purchase price. The higher your down payment, the lower your monthly mortgage payments are likely to be. Many lenders require a down payment of around 20% of the home's purchase price, but there are options available for smaller down payments (see Government Grants below) ..
  4. Get Loan Pre-Approval: Before you start house hunting, get pre-approved for a mortgage from a lender. This will give you a clear idea of how much you can borrow and help you narrow down your home search to properties within your budget.
  5. Start House Hunting: Once you have a pre-approval letter, you can begin searching for your dream home. Consider factors such as location, size, amenities, and price when evaluating properties.
  6. Make an Offer: When you find a home you like, work with your real estate agent to make an offer. If you are buying at a private sale, you should make your offer to purchase subject to finance and Building and Pest inspection. This way, if you offer gets accepted, you can then arrange the inspections. If you are buying at auction, you will need to get your finance and building and pest inspections done prior to action.
  7. Get a Home Inspection: After your offer is accepted, schedule a home inspection to identify any potential issues with the property. This will help you make an informed decision about whether to proceed with the purchase.
  8. Negotiate your loan . Even though you may have approval from one bank there is nothing stopping you from shopping around to get a better rate.
  9. Settlement: You will need to find a solicitor to handle the paperwork for your settlement.
  10. Pay off your loan as quickly as possible by  using this simple hack to save interest .and reduce your loan term

What Government Grants are Available?

As for government grants available to first-time homebuyers, these can vary depending on where you live. In many countries, governments offer assistance programs aimed at helping first-time buyers afford their first home. These programs may include:

In Victoria, Australia, there are several government grants and assistance programs available to help first-time homebuyers enter the property market. These grants and schemes are designed to make homeownership more accessible and affordable. Here are some of the main programs:

  1. First Home Owner Grant (FHOG).  The FHOG is a national scheme available in Victoria and other states and territories in Australia. Eligible first homebuyers in Victoria who are purchasing or building a new home may be entitled to a one-off grant of $10,000. The grant amount and eligibility criteria can vary depending on factors such as the value of the property and whether it's located in a metropolitan or regional area.
  2. First Home Buyer Duty Exemption or Concession: First-time homebuyers in Victoria may be eligible for a stamp duty exemption or concession when purchasing a new or established home. The amount of duty payable and the eligibility criteria depend on factors such as the value of the property and whether it's being used as a primary residence.If you purchase for 600,000 or less you receive the first home buyer duty exemption. If you purchase for $600,001 to $750,000 you receive the first home buyer duty concession.

  3. First Home Loan Deposit Scheme (FHLDS): The FHLDS is a federal government initiative that helps             eligible first-time buyers purchase a home with a deposit of as little as 5% without needing to pay for            lenders mortgage insurance (LMI). This scheme assists buyers in avoiding the additional cost of LMI,            which is typically required for loans with deposits of less than 20%.. You can apply for this with your           Lender

4. Shared Equity Scheme: The Victorian Government offers a Shared Equity Scheme to help eligible first-time buyers purchase a home. Under this scheme, the government contributes to the purchase price of the property, reducing the amount of money the buyer needs to borrow. In return, the government retains a share of the equity in the property.

These programs and grants aim to support first-time homebuyers in Victoria in various ways, whether through financial assistance, stamp duty concessions, or access to affordable home loans. It's essential for prospective buyers to research and understand the eligibility criteria, application process, and deadlines for these grants and schemes, as they can change over time and may have specific requirements.

For the most up-to-date information and guidance, individuals should consult the relevant government agencies or seek professional advice by contacting us.

 Disclaimer: This information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.