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Buying Your First Home
Our goal at The Grand Homes is to simplify and stress-free your building path. Our thorough service includes access to our specialist in-house interior design team, Interiors, and modern design centre in Melbourne, where you may investigate and hone your design concept with our knowledgeable professionals.
Understanding your borrowing power
How much can I borrow” is probably one of the first questions you’ve asked yourself, and there’s no simple answer to this question as it all comes down to your personal financial situation. Lenders will measure your ability to make loan repayments comfortably without putting you in financial hardship. This is called a debt-to-income ratio (DTI) or loan-to-income ratio (LTI). You’ll also hear this term a lot – loan-to-value ratio (LVR). This describes the amount you need to borrow to buy a particular property. Generally, the lower the LVR the better, as a lower LVR carries less risk. It also means you’ll have a head start on fully owning your home and have more equity from the get-go (equity is the market value of your property less how much you owe on it). When your LVR is over 80%, the cost of getting a home loan may increase because you might need to pay for Lenders Mortgage Insurance (LMI). LMI protects the lender if you can’t keep up with your home loan repayments. Even though you’re paying for this insurance, it’s not protecting you. It only protects the lender. So generally, the higher your LVR, the more LMI will cost. But more on LMI coming up.
Seek Approval in Principle
To help you understand the maximum amount you’ll be able to borrow from a lender, you should ask for an pre -approval in Principle or conditional approval. Generally, it shouldn’t cost you anything and you need to know that it’s no guarantee to getting a home loan. What it does do is give you an idea of how much you can borrow, so you can narrow your house hunting and help with your budgeting. Once you’ve got an Approval in Principle, it’s valid for 90-days from when it was approved. If it lapses before you’ve signed a contract on a house, you’ll have to re-apply. Make sure you ask your lender or broker about the AIP renewal policy.
Time to start house hunting
Once you’ve got your finances sorted, it’s time to start the exciting part – finding your dream home! This is the part where you’ll be scrolling various real estate sites a few times a day, heading along to countless inspections, or visiting a number of display homes to find the right one. This part can seem overwhelming but remember, searching is half the fun!
Deciding a location
It’s the million-dollar question for all house hunters, not just first home buyers. How do you choose the right suburb to buy in? There’s no right or wrong answer, but there is a well-tested formula. First, know what you can afford without it affecting your lifestyle too much. You still want to be able to go out occasionally and have a holiday each year! The next is considering in the suburb are– the shops, where you might walk to for a coffee, transport links, hospitals and public transport options. Even if you’re not considering a family right now, it’s wise to factor in school zones and childcare options, especially with childcare centres experiencing long waiting lists. Another thing to consider is the demographics of a suburb. What’s the unemployment rate like? What will your insurances cost? What will your council rates be?
What you want versus what you need
House hunting is exciting. But before you jump in, you need to know your non-negotiables and recognise the wants. Remember, every extra feature or room you want adds a cost to your mortgage. You might find it helpful to make a list and ask yourself, do you really need the fifth bedroom and third bathroom, or can it wait for the next home? Identifying the essentials could save you money and stop you wasting time looking at the wrong houses. Potential resale should also be front of mind. It’s easy to let emotions take over when looking for a home to live in, but be conscious of the location, return, desirability and resale value of the home you’re looking at. Things like a north-facing orientation, great floorplan, size, security, privacy, and of course, scarcity, all add value to your home.
Check the property before you buy
If you’re buying established, you should always check the property carefully before you buy. If you discover problems with the property after an offer goes unconditional, you may not be in a position to have them rectified. A building inspection report will cover everything from roof, walls and ceilings, any signs of cracks or signs of erosion, plus electrical wiring and plumbing.
How much deposit is required for a block of land?
Depending on the land Developer, when purchasing land you require 5-10% of the purchase price for a deposit. The balance of the purchase price is not payable until the new land title is registered, often in 12-18 months time. Be sure to ask your land agent when title registration is due. Your bank or mortgage broker thoroughly understands this process and will help guide you through this. They can even organise pre-approval which can save you time in the long run.
With well over 100+ completed homes in the last 15 years, we have evolved into an industry leader, with a trusted name for building beautiful, personal, original, family homes and Dual Occupancies.
AN ORIGINAL DESIGN, EVERY TIMEAN ORIGINAL DESIGN, EVERY TIMEAN ORIGINAL DESIGN, EVERY TIMEAN ORIGINAL DESIGN, EVERY TIME
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If you’re unsure where to start with your design, here are just a fewexamples of different floor plans to get you inspired.
