Brisbane First Time Buyers Guide 2020

If you’re looking to buy your first home in Brisbane’s North West, Calibre would be delighted to help

Buying your first home is an exciting time, but it can also be challenging and incredibly overwhelming if you do not know where to start.

After all, becoming a homeowner is a huge decision to make.

From handing over a large sum of money, to committing to settling in one place for a while, it is important that you are really ready for the responsibility of buying your first home.

These are some factors to consider before deciding:

  • Job security
  • Credit score
  • Being ready to settle

Once you decide that it is the right time for you, here are some steps you can take towards achieving your goals.

Look into your finances

Your dream of owning a home will only be possible if you are in the financial position to make it happen.

You can start by:

  • Making an inventory of your income, savings and loans
  • Ordering a copy of your credit report
  • Listing your debts and put a plan together for clearing them away

Doing these things will help you be realistic about your suitability and be more prepared when it comes to shopping for lenders.

You may want to consider the help of an accountant to help you figure out how much you can afford to repay.

Know the costs involved

It is common for first time buyers to underestimate the costs involved in buying a house.

In order to be as prepared as possible, it is important that you are fully aware.

Here are some costs that you are likely to incur:

  • Deposit – If you want to avoid paying Lenders Mortgage Insurance, you will need at least 20% deposit of the property price.

  • Financing costs – If do not have the 20% deposit, you will need to pay for Lenders Mortgage Insurance to protect the lender.

  • Fees – You will need the help of an agent for the entire purchase process and a conveyancer for the legal parts, both of which come with a cost. In addition to that, fees are also involved for the mortgage application and valuation.

  • Stamp Duty – This amount depends on where you live and is applied on the selling price of a property. An online stamp duty calculator can provide you with a specific amount so that you have a figure to work with.

  • Inspections – To make sure that a property is pest free and structurally sound, it should be inspected. Though inspections are not compulsory, we think it is better to get at least a building and pest inspection carried out before buying a property to save on potentially spending thousands on repairs in the long run.

  • Other costs – Along with mortgage repayments you also have to make room in your budget for council rates, utilities, maintenance and removal services.

Know what you want

To make sure that you have a clear sense of what you are looking for, compile a list of must-haves.

This will help prevent you being swayed by your emotions when looking for a home.

Bear in mind that the pointers should be realistic and within budget or you risk setting yourself up for disappointment down the line.

Also, remember that your first home is not necessarily your forever home and that you may need to compromise on your ideals.

Here are some common considerations:

  • Location – is it important for your property to be close to your work, the children’s school, to family and friends?
  • Accessibility – do you need reliable access to public transport, shops and services?
  • Suburb information – does the suburb meet your lifestyle and budget?  
  • Type of property – are you clear on the type of house that you want?
  • Style and design – do you want a modern home or an older one that requires some renovation?
  • Amenities – do you desire a deck, a sprawling garden or several parking spots?

It is a good idea to list as much information as you can, arranging in order of priority from ‘non-negotiable’ to ‘could live without’.

Reach out to an agent

changing property managers

In order to buy a property, you should seriously consider appointing a buyers’ agent.

The truth is, having a real estate agent by your side will make this process infinitely easier.

How do they help?

  • Advise you in choosing the right home
  • Inform you on methods of purchase
  • Carry out background checks on properties
  • Negotiate with sellers
  • Recommend other industry professionals

When looking for an agent, you want to consider their experience and customer reviews to see whether they have a proven and positive track record.

Mortgage shopping

After knowing what you want in a home, it is time to look for a loan to finance it.

Make sure to ask about the following:

  • Term of the loan – How long will it take to repay?
  • Interest rates – Are they fixed or variable? How are they calculated?
  • Redraws – What are the fees?
  • Additional repayments – Could you make additional repayments if you wanted? If so, what are the conditions?

Before choosing a mortgage, make sure that you understand all the terms. You can seek the services of a mortgage advisor for some impartial advice.

Loan pre-approval

Getting your loan pre-approved before looking for a property is a smart move as doing so will set your price range.

It also gives you an edge with the seller, who ideally wants a buyer who has secure financing in place.

You can work to securing your lenders pre-approval by providing your financial details, such as savings, income, credit report, and investments.  

House hunting

breaking a lease

Now, after all the preparation, you can finally begin to look for houses.

Of course, you won’t buy a home without seeing it in the flesh first.

Here are some things you should watch out for during an inspection:

  • Roof, gutter and drains
  • Mould
  • Electricity
  • Plumbing
  • Flooring
  • Heating, ventilation and air conditioning
  • Walls

Your main focus is to ensure they are all functional and safe.

Help to reduce costs may be available

If buying your first home is what you have your sights set on, then 2020 might just be the best time to make it happen.

As of January 2020, the Australian government has introduced a first home buyers grant known as The First Home Loan Deposit Scheme (FHLDS). What is it about?

  • 10,000 low-deposit loans a year have been guaranteed for eligible low, and middle-income earners who have saved up a deposit of as little as 5% of a property’s value.

  • There are several criteria used to determine eligibility under the scheme, all relating to your eligibility as a first home buyer.

  • The FHLDS “is only available for the purchase of a modest home” and therefore have capped the price of the homes eligible under the scheme. These vary depending on where you want to buy, in Brisbane the cap is at $475,000.

You can use the National House Finance and Investment Corporation (NHFIC) eligibility check tool to help you see if you could make use this scheme.

We’re here to help

At Calibre Real Estate, we love helping first time buyers.

For guidance you can trust, feel free to give us a call on 07 3367 3411.

191 Musgrave Road,
Red Hill QLD 4059

07 3367 3411