Mar 15, 2012

Your First Home – What Do You Really Want?

This year, I purchased my first new house. Ok, house may be a bit of an exaggeration. It’s a 2 bedroom apartment – but on the bright side, it is in a great spot, feels like home and offers every convenience I need. As a new home buyer, I tackled a lot of hurdles. First and foremost, agents, solicitors, banks – everyone can smell how green you are from a mile away. You look new, you look scared and nine times out of ten, you look like you have no idea what you’re doing. Buying is nerve-wracking. This is a ridiculous amount of money (especially where I’m from in Sydney), it is a very long commitment – and what if you decide next year that you don’t really like it, or your neighbours are horrible, or you get a job in another city?

Questions and doubts like these are all thoughts that plague your mind when you are buying your first home. You want to know you’re making the right decision and that you aren’t going to regret the decision later –take it from me! Given I now have a beautiful apartment which is lovely in theory, but also equates to monthly repayments, crazy strata levies, council tax…and restriction to holidays and travel – take it from me, you want to know you won’t regret it! So how can you be sure? Before you book your removalists, you need to work out what you really want – and stick to it!

1. Location
First of all, when you think you’ve found the place you’re going to buy, make sure the location is perfect. It needs to be convenient to your work and that of anyone buying with you. It also needs to be convenient to a variety of transport, as this is a twenty-to-thirty year commitment, so likely your jobs will change at least a few times during that period. Make sure you will remain happy with how far it is to shops, the city centre and other facilities, and know for certain you will always be happy with putting up with that distance.

2. Costs
A lot of us, when we find our ‘dream home’ don’t take a great deal to budge when it comes to extending our maximum spend threshold. We think, ‘ah, it’s only a little more’, and in our heads it seems easy to stretch the weekly wage that far. But it’s not, and your wage is not always predictable. Make sure the repayments are comfortable, not difficult at all. Also make sure you have enough savings that should you be terminated at work or leave, you can make repayments for at least a few months.

3. SizeYou need to decide what size home you want – and how much debt you want to go into! Are you after a flat or is a kit home more in your price range?

4. Additional costsIt is truly heart breaking when you move into your new place, thinking ‘I’m not wasting dead money on rent now’, and end up paying huge amounts in strata levies or other costs. Make sure you know that other costs are involved and if you’re happy with them especially if you are moving a long distance and need interstate removalists.

5. Adventure
Short and simple – if you don’t earn a lot of money, make sure travelling and holidays are out of your system for at least five years.

6. Home loans
Seems like a no-brainer, but read the small print. Make sure you understand how interest rates work, negotiate yours, and know you can make repayments comfortably still if the rate goes up by 2%.

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