Home Loan Guide For First-Time Buyers 


Buying a house can be a huge milestone in anyone’s life, irrespective of age or financial standing.

But with every life-changing decision comes a ton of responsibilities, and here also, choosing the right home loan is the first crucial step ahead!

After all, there’s a reason why the average home loan size for first-time buyers is $485,014 in Australia alone.

So if you’re also a first-time buyer, you must be overwhelmed with numbers and interest rates.

But don’t worry, this guide here will be your companion to making things simpler!

1. Have a clear idea about your finance

Okay, this is the first step while understanding how much loan you should apply for. Make an honest list of how much you’re spending every month and see the costs that can be reduced.

Try applying for special schemes designed by your government. If you live in Australia, for example, you also need to see if you’re eligible for First Home Owner Grant (FHOG), a scheme made exclusively for first-time homeowners by the Australian Government.

Ask yourself where you’re currently standing as far as finances are concerned, how much you can afford to repay every month, and what sort of mortgage will suit you the best. Alternatively, you can work with mortgage brokers for first home buyers to make sure you’re on the right track.

2. Explore home loan rates

Next up, you need to check the home loan rates as applicable in your state or country so that you can choose one which works best for you.

You can begin your search from Real Simple Home Loans, Australia. It allows you to compare the interest rates and talk to the experts about how to apply for it.

Not just that, the mortgage brokers at Real Simple Home Loans will walk you through the entire process so that you don’t have to take the entire burden upon yourself!

After the papers are in order, you will be asked to produce the necessary documents for pre-approval. This process can last between 3 to 6 months.

3. Choose the location wisely

Yes, bank loans are important but did you know that they are dependent on the location of your dream house? Here again, keeping your finances in check can be useful because then you’ll get a clear picture of how much to spend.

For example, prime locations in the city will cost more than a suburban home, but they can be ideal for young professionals. Check if commute services are available nearby or not.

Once you have decided, talk to your bank about the location and the home loan rates in that area. You can even talk to your real estate agent and figure out a plan to get a home loan at lower interest rates.

4. Figure out the type of house to buy

Now that you’ve identified the ideal location, it’s time to choose your ideal home. Do you want a small one-bedroom apartment or a two-storeyed bungalow? Are you buying a house to expand your family or to shorten the distance between your house and your office?

Make a list of “must haves” and “may haves.” In the first list, mention essential things, like commute services or schools for your children.

In the second one, write down things you don’t necessarily need but would still wish to buy- an outdoor garden or pool.

Next, stick to your price range and never go above it. If pre-approved for a $400,000 loan, don’t waste time looking for houses advertised at $500,000.

5. Try negotiating

Lastly, negotiating is never a bad idea, especially if you’re buying for the first time. If you’re not sure, talk to Real Simple Home Loans. Or you can even attend different auctions to see how negotiating works.

Bring along a professional or an experienced family member or friend to help you out. Since there’s no cooling-off period in an auction, you’ll be expected to pay a certain amount right away, say 10% of the total deposit.

Next, the seller will prepare an official contract, but you must go through the terms and conditions carefully. Many contractors might try to deceive you as an amateur, so be very careful.

Over to you…

Buying your first house might seem pretty complicated, but it doesn’t have to be! Just breathe and remember to take every step carefully. And don’t let the excitement blur your future vision.

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The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.