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10 Things to Consider When Buying Your First Home in Victoria

Posted by Buxton Lifestyle - 15 June 2023

Buying your first home is an exciting time but there’s a lot to keep on top of.
Below, the team at Buxton Real Estate look at some of the most important considerations.

1. What Can You Afford?

Determine your budget early, including your borrowing capacity. This will vary
between different lenders depending on how they assess your ability to repay your home loan. This involves looking at things like income, expenses, assets, credit history and more.

2. Get Pre-Approval Before Searching

A pre-approval from your selected lender allows you to search for a property that strikes the right balance between what you can afford, where you want to live and what amenities you want to have. Make a list of must-haves and nice-to-haves, looking at features like:

● Property size

● Number of bedrooms

● Backyard or garden

● Proximity to amenities like shops, schools, cafes, local parks and public
transport.

Consider how your lifestyle could change in the future, for example, if you plan on
having children.

3. Building vs Buying Your First Home

When it comes to a first home that is uniquely yours, it’s hard to beat building from scratch. Of course, buying an existing property is quicker and can come with less stress. If you do choose to build your first home, ensure you pick a builder or
developer with a strong track-record of good quality homes that suit your tastes and needs. If opting for a house and land package, explore the location to see if the houses, streetscapes and parklands fit your lifestyle.

4. Apartment vs House

Choosing between an apartment or house usually comes down to what matters most to you - more space or location? For example, purchasing an apartment is ideal for those looking to live in inner city, high demand areas where houses are much more expensive or hard to come by. Meanwhile others looking to grow their family would rather opt for a spacious house in a suburban area.

5. Save for a Deposit

Once you find a property you like, aim to save a deposit of 20% as you won’t have to pay lender’s mortgage insurance. Work out a budget so you’re setting aside money every week. Set up a savings account or term deposit. Another good approach is using the First Home Super Saver Scheme for up to $30,000 of savings. If you’re struggling with affordability, you can also look into the Victorian Homebuyer Fund.

6. Your Eligibility for the First Home Owner Grant

As a first home buyer, your ability to access certain grants and concessions can be the difference between whether you can afford to buy a home or not. The First Home Owner Grant (FHOG) is a government scheme aimed at helping you purchase or build a residential property. In Victoria, it’s a one off payment of $10,000 made at the time of settlement and applied directly to your home loan. The FHOG is not available for investment properties.

7. Stamp Duty Concession or Exemption

Stamp duty is the biggest upfront cost you can incur aside from the purchase price of the property itself. However, concessions and exemptions can reduce the financial burden for first home buyers. Like the FHOG, stamp duty rates, concessions and exemptions vary depending on the type and value of property.

8. Principal Place of Residence (PPR) Concession

A principal place of residence (PPR) duty concession is also available for Victorians who buy a new or established property valued up to $550,000. To be eligible, you must intend to move in within 12 months of your settlement date and live there as your primary home for at least a year.

9. Consider Hidden Costs

Get a good understanding of all the hidden costs associated with purchasing a new home, including:

● Lenders mortgage insurance - Applies if you borrow more than 80 per cent of your home’s value.

● Loan fees - There can be various upfront loan establishment fees charged by lenders. Look into these and take time to compare fees between different loan options.

● Conveyancing fees - The cost of the legal work required to transfer the property into your name.

● Building inspections and insurance - For existing properties, inspections ensure you’re protected from problems like structural issues and pests. Meanwhile, insurance protects you once you take ownership.

● Rates adjustment - Sometimes, you may have to pay a portion of the council rates owing on the property on settlement day. Other costs to take into account include utilities connection, moving costs and any costs associated with any changes or fix-ups you want to make to your new home.

10. Partner With the Right Agent

The right buyer’s agent can help make the process of purchasing your first home seamless. They can help with:

● Finding properties in your selected local markets that meet your criteria

● Determine a fair price for a property

● Oversee the process of inspections and due diligence

● Negotiate a price or bid at auction on your behalf

● Manage the process of finalising the sale, settlement and liaising between relevant parties.

At Buxton, we help first home buyers find the perfect property for them.

Contact us today for more advice about buying your first home in Victoria.

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