Settlement Guide: 5 tips for home buyers

Escalating property prices in Australia’s major cities are making it difficult for first-home buyers to get into the market. Knowing how to budget and doing your research can help remove some of the stress. Here are some tips.

Person holding small house in cupped hands Source: AAP

1. Save a deposit

A deposit of 10 per cent of the purchase price is required when buying a home. However, buyers can avoid paying extra thousands for lender’s mortgage insurance if they save a deposit of 20 per cent. Once you’ve saved your deposit the next step is to get a loan approved.

2. Investigate mortgage options and get a home loan pre-approval

Make sure you know how much you can afford to spend on a property. Before you decide on a home loan ask your lender for a key facts sheet to compare the different types of loans available.

3. Borrow within your means

Be careful not to borrow over your limit. You don’t want to be forced sell your house if you cannot keep up with your mortgage repayments.

4. Spend money on an inspection report

Building inspections may cost you a few hundred dollars but can potentially save you thousands by avoiding any issues after you’ve moved in.

5. Budget for additional costs

Make sure you budget for the extra costs involved in buying a property such as stamp duty, conveyance fees, council rates and strata levies.

The Federal Government’s website is a good starting point for people planning to buy a property.

The Australian Securities & Investments Commission (ASIC) provides useful information for home buyers.

Budgeting advice is being provided by Consumer Affairs Victoria and Fair Trading NSWoffers a list of topics for home buyers.