If you're looking to put your flatting days behind you, buying a home as a young couple is an exciting prospect.
However, there are several factors to keep in mind when you decide it's time to buy. From coming up with a deposit to choosing the right area, the buying process can seem complicated at the best of times.
Fortunately, with some careful planning and a sense of reality about what you can afford, you'll be in a much better position to make an offer on that perfect property, says First National Real Estate chief executive, Ray Ellis
‘Whether you want to buy a home in six months or three years time, couples first need to save up a significant deposit.
‘Depending on the area you choose to buy in and the kind of property you're after, the deposit you need could vary greatly. For this reason, you'll first need to research average house prices in your desired area so you know what figure you're working towards’.
The next most important thing to consider is positioning yourselves to pay off your loan as quickly as possible. A loan to value ratio (LVR) is a figure that's calculated by dividing the amount you're borrowing by the value of the property you want to buy, says the Australian Securities and Investment Commission. This figure plays a vital role in the length of time it will take you to build equity.
‘Couples need to borrow whatever their deposit won’t cover. So they should aim for a low LVR - ideally less than 80 per cent. Otherwise, they'll almost certainly need Lenders' Mortgage Insurance, which protects only the lender if they default. This is an extra cost that gets added to loan repayments, but doesn’t help pay off the loan, so it’s important to work on coming up with a deposit of 20 per cent or more to avoid this’ says Mr Ellis.
If you're planning on starting a family in the future, you should consider whether the home you're buying now will accommodate your future family or whether you’re happy to sell and buy another more suitable property when the time arrives.
‘Consider the number of bedrooms and bathrooms as well as outdoor space. You'll also need to investigate what schools and transport is available in the area. Thinking ahead can eliminate the need to sell a home that you've come to love because it's become unsuitable for your needs’ says Mr Ellis.
Posted by First National Real Estate
For more information, contact National Communications Manager, Stewart Bunn on 1800 032 332
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