Tricks and Tips for First Home Buyers
Buying a home is the single biggest purchase most people will make in their entire life, and taking that first step can be both terrifying and exhilarating.
Good Things Take Time
First and foremost, don't rush! Take your time. Don't put time constraints on yourself to find a house within ‘so many weeks’ or try to get financed within ‘so many days’.
Buying a house can be long process, and that's okay. Anticipate spending the next few months searching, negotiating, and then closing the deal. If you rush you may end up buying a house that isn’t quite what you want or need. There is always another deal around the corner.
You should secure a pre-approval as soon as possible to help speed the financing along. It may boost your bargaining power too!
Know What You Want
Walking into the house hunt knowing what you are after is definitely going to be a big part of your successful home buying journey. Otherwise, you might end up looking at dozens of houses that simply don't match what you are after.
So, your search should really start at home. Make two lists: a must have list and a want to have list. Each should be handed to your agent. Remember: Be realistic! Your must have list will probably include things like location and square meterage. Your like to have list might include extras, like a fenced backyard or off-street parking.
If your agent has these must-haves in hand, they can assemble a list of properties for you to visit that best match what you are after. Otherwise, they'll waste time showing you homes that don't suit your wants and needs.
Do Your Research
Don't let price be the leading criteria either. Sometimes, things are cheap for a reason, and that especially applies when it comes to housing.
Remember, buying a house is an investment. Once it's all paid off, you want a home that's going to be worth more than what you paid for it. Is the neighborhood growing? Is the town growing? Is it a sought after area? Those are things to look at when purchasing a home.
When looking at neighborhoods, you should also be thinking about the development of those neighborhoods and the sales trends. Is the house you're looking at a new build? Is it in an area with a lot of homes for sale? Why is that?
Maybe people are moving because a whole new sub-development is springing up around the corner and they want to get away from the noise. Perhaps this is a steal of a deal on a street where homes are very well loved by their owners.
Doing your own research is really important to the home buying process. Don't just trust the information real estate agents give to you. Remember, at the end of the day, they just want to sell you a house!
Set A Realistic Budget
Budgets are important. You need to calculate the affordability: How much of a mortgage payment you can afford each month, the deposit, and conveyancing / lawyers costs associated with purchasing a house. Have you thought about home insurance (consider visiting www.ami.co.nz/house-insurance to arrange a quote).
Let your agent know what your realistic budget is. If you do happen to enter into an auction scenario, it might be best to actually have a friend or trusted family member bid for you so that you stay within your budget.
You should also be looking into the various types of home mortgages available (visit www.asb.co.nz/home-loans-mortgages ).Typically, you have floating rate mortgages or fixed rate mortgages for a short term. If interest rates look like they may drop, then opt for fixed. If the OCR is going up, interest rates follow, then opt for fixed. If your crystal ball isn’t working, opting for a short term fixed rate gives you time to make a longer term assessment.
If your lender allows you to lock in an interest rate early on, you should do that as it can provide certainty, especially early on in your loan term when you should be paying off as much as you can, as fast as you can.
First-Home Buyer Tips
Get pre-approval for your loan early on in the process
Lock in your loan, or at least a portion of your loan, so that you can save yourself at a fixed interest rate for a few years if the rates are low
Make sure you get a building inspection for any property, whether it's one year old or one hundred! In Auckland, check for leaky homes, in Christchurch, for earthquake damage that has been poorly repaired.
Research the reputation of a developer if you are looking at buying a new build.
Do your own research into the neighborhood.