First-time home buyers’ checklist

Navigating the world of property ownership and investment can be daunting for first time home buyers.

Set yourself up for success with a good understanding of the buying process and what you need to secure the right home loan for your needs.

Disclaimer: The information contained in this article is of a general nature only and should not be taken as financial or legal advice on any of the topics discussed. Always consult a financial adviser before making any investment decisions.

Here’s a handy guide to get you started:

1. Review your budget and get your finances in order. This includes checking your credit history and ensuring that you establish a history of paying your debts and bills in full and on time. Shed any unnecessary expenses, reduce credit cards and other debt, set up automatic bill payments and make sure that you have consistent savings habits.

2. Calculate your borrowing power. Use an online calculator to help you determine how much you can afford to borrow for your home. That way, you can start looking for properties to match your borrowing power.

3. Research grants and schemes that may be available to you, such as the Federal Government's Home Guarantee Scheme.

4. Be realistic about what you can afford – your first home doesn’t have to be your dream home.

5. Make a list of the must-haves for your new home. Consider your lifestyle and desired location – what do you want out of your first home? How many bedrooms and bathrooms? What about the size of the backyard for your future kids and pets? And garage space or off-road parking needs shouldn’t be overlooked. Purchasing property in a suburb where street parking is monitored from 9am to 6pm isn’t always a liveable solution.

6. Find out about the loan approval process and how to position your application for success.

7. Investigate the right type of loan for your needs, and secure pre-approval before beginning a dedicated search. There are a number of fixed and variable options, each offering a particular set of benefits and features. For example, with a fixed interest rate there is usually a cap on the additional payments you are able to make each year.

8. Research the markets you are considering, including local transport, shopping and amenities, community facilities, sports and recreation opportunities and more. If you are looking at a particular street or home, remember that you may need to live alongside your neighbours for years or even decades. Visit the neighbourhood and street at different times and on different days to see who you will really be living next door to.

9. Check the property sales history and turnover for the areas you are looking at. There are many databases that offer this important information, including realestate.com.au and domain.com.au

10. Track new properties on the market that meet your needs. How long are they on the market for? Are sale prices above or below the original listing price? Understanding market trends will help you build your knowledge and negotiating power.

11. Talk to the professionals, such as real estate agents, brokers and financial advisors, to get a good idea of how much you can afford. They can offer guidance on the real market value of houses in your desired locations.

12. Confirm the documentation that you need to begin the process of applying for a loan with your lender.

13. Most importantly, find people you can trust who have followed this process before. Ask them about the pitfalls they experienced – and learn from their mistakes. Don’t be afraid to ask for help. Always seek advice and several perspectives on properties and financing options to help you build the best approach to successfully purchasing your own home.