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3 tips for first homebuyers to get into the market ASAP


You've probably been mentally choosing the paint colour of your bedroom walls and scoping out new sofas for months, if not years.

To help first homebuyers turn your dream of buying your own home into a reality, we've compiled these top tips:

1. Sort out your debt

If you have some personal debts, you might find it harder to get a home loan approved, or you may not be able to borrow quite as much as you wanted.

This is because banks want to be sure you can afford all of your financial obligations. If you've got more debts, they worry you'll have trouble paying these repayments and your mortgage as well.

What can you do about it?

Focus on paying off any large and/or unsecured debts before you apply for a home loan, especially high-interest debts. If you have a few personal loans, credit cards and/or car finance, consider consolidating those debts into one.

Did you know?

Some debts, such as university HECS debt, are far less of a concern to a lender than unsecured debts such as credit cards, so create a plan to pay off the highest interest debts first.

See how much you can afford to borrow

2. Work out if you're entitled to free money

All property buyers have to pay stamp duty in Australia – but if you're a first home buyer, you may be eligible for a concession.

Depending on where you live and they type of property you buy (established or new), you might even or even a complete exemption.

These can amount to savings of up to tens of thousands of dollars.

What can you do about it?

Research the stamp duty discounts, concessions and exemptions that apply in your state or territory.

Did you know?

Purchase price caps or limits apply when it comes to the value of the property you buy, so make sure you know what these are before you start property shopping.

Learn how much the stamp duty discount or exemption is for you

3. Get across your finance options

The home loan market is complex and competitive, which is why it's a good idea to compare home loans, to make sure you're getting the right rate and features.

There are a number of options – from variable to fixed rate loans, to interest-only and investment loans – and there are many different types of mortgages to suit different situations.

But working out which one is right for you can be overwhelming.

What can you do about it?

Get really clear on your financial situation, including your savings, your monthly budget and your income. Then, use online calculators to work out how much you're eligible to borrow. If your situation is complex, consider getting free, personalised advice from a mortgage broker.

Did you know?

If you're self-employed, you might find that some banks rate you as being too "high risk", while others are more than willing to lend money. Compare options at different banks and lenders to find one with a policy that suits your specific situation.

Image: Shutterstock

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