Getting Ready for Your Next Move

For many renters, the dream of owning a home starts with a simple question: “Could I afford to buy?”

But being ready for home ownership is about more than qualifying for a home loan. It’s about making sure the numbers work for your lifestyle, your future plans and the responsibilities that come with owning a property.

As winter draws to a close, September can be a great time to take a step back, review your finances and prepare for the months ahead. Rather than rushing into the market, use this period to get your financial foundations in place.

Because the goal isn’t simply to buy a home.

It’s to buy a home you can comfortably afford and enjoy living in.

Start With a Repayment You’re Comfortable With

One of the smartest things you can do before speaking with a lender is work out what you could comfortably afford to repay each month.

A lender may tell you the maximum amount you could potentially borrow, but your personal budget tells a different story.

Think about your regular expenses, groceries, transport, childcare, insurance, subscriptions, holidays, entertainment and savings as well as the occasional costs that can catch you by surprise.

Then look beyond the mortgage.

Home ownership can also involve:

• Council rates
• Home and contents insurance
• Utilities
• Strata levies, where applicable
• Repairs and maintenance
• Unexpected household expenses

A property that looks affordable based solely on the mortgage repayment may feel very different once the full cost of ownership is taken into account.

The right home is one that fits comfortably within your life, not one that leaves you stretching every payday.

Your Deposit Is Only Part of the Picture

Saving a deposit is a major milestone, but it’s important not to assume that every dollar you have should go towards the purchase.

Buying a property can involve additional costs such as conveyancing or solicitor fees, building and pest inspections, loan-related costs and government charges. The exact costs will depend on your circumstances and the property you purchase.

It’s also worth thinking about what happens after settlement.

Once you own the property, you’re responsible for repairs and maintenance that a landlord may previously have covered. Having an emergency fund can provide valuable breathing room when something unexpected happens.

A larger deposit can reduce the amount you need to borrow and may help you avoid or reduce lender's mortgage insurance (LMI), depending on your circumstances. However, using all your savings for the deposit could leave you financially vulnerable once you move in.

Buying with a healthy financial buffer is often more valuable than simply buying with the biggest possible deposit.

Get Your Existing Finances in Shape

If buying is on your horizon, now is a good time to review your existing debts and financial commitments.

Make sure repayments are being made on time and think carefully before taking on significant new debt, particularly if you’re planning to apply for finance soon.

Lenders may consider commitments such as:

• Credit cards and their limits
• Personal loans
• Car finance
• Buy-now-pay-later commitments
• Existing home loans or other debts
• Regular financial commitments

Reducing unnecessary debt can potentially improve your borrowing position and, just as importantly, give you more room in your household budget.

If you’re planning to buy within the next year, it may be worth thinking twice before making a major financed purchase simply because you can.

Get Your Documents Ready Early

Finding the right property can happen quickly. Having your finances organised beforehand can make the next steps much easier.

Depending on your circumstances, your lender or mortgage broker may request documents such as:

• Recent payslips
• Bank statements
• Identification
• Evidence of your savings and deposit
• Details of existing debts and financial commitments
• Tax returns and financial information if you're self-employed

Getting these documents together before you start seriously inspecting properties can help you understand where you stand and avoid unnecessary delays later.

It also allows you to ask questions and understand your borrowing options before you become emotionally attached to a particular property.

Understand What Help May Be Available

If you're a first-home buyer, it’s worth researching the government assistance that may be available to you.

Depending on where you live and your circumstances, this could include grants, concessions or first-home buyer schemes.

Eligibility rules and available programs can change, so always check the current requirements through the relevant government authority or speak with a qualified professional.

Don't assume you aren't eligible simply because you haven't looked into it.

Surround Yourself With the Right Advice

Buying your first home can feel overwhelming, particularly when you're trying to understand lending, contracts, inspections and settlement all at once.

You don't have to navigate it alone.

A qualified mortgage broker or lender can help you understand your borrowing options and what repayments may look like.

A solicitor or conveyancer can explain the legal side of the purchase and help you understand the contract.

And independent government and consumer resources can provide useful information about the buying process and your rights.

The more informed you are before you start looking, the more confident you can be when the right property comes along.

Think Beyond the Purchase Price

One of the biggest mistakes first-home buyers can make is focusing entirely on the price of the property.

Think about the bigger picture.

Can you afford the repayments if your circumstances change?

Will you have enough money left for emergencies?

Does the location work for your commute and lifestyle?

Is the property likely to suit you for several years?

Are you comfortable with the maintenance and responsibilities that come with ownership?

These questions can be just as important as the purchase price.

Home ownership is a long-term commitment, so it pays to think beyond the excitement of getting the keys.

Make the Most of the Last Stretch of Winter

There’s something about the transition from winter to warmer months that encourages people to think about fresh starts.

If owning a home is one of your goals, September is a useful time to get organised.

Review your spending.
Build your savings.
Reduce unnecessary debt.
Understand your borrowing position.
Research available assistance.
Speak with the right professionals.
And start thinking about what you actually want from your next home.

Then, when you do enter the market, you’ll be making decisions from a position of preparation rather than pressure.

Ready for Your Next Step?

At OBRIEN Real Estate Agency HQ, we believe buying a home should be about more than finding a property you love.

It should be about understanding the opportunity, asking the right questions and making a decision that works for you.

If you're thinking about making the move from renting to owning in Blacktown, Prospect or across Western Sydney, start the conversation early.

The better prepared you are, the more confidently you can make your move.

The information provided in this article is general information only and is not intended to constitute financial, legal or tax advice. Government programs, lending criteria, fees and eligibility requirements can change. Speak with a qualified mortgage broker, lender, solicitor, conveyancer or financial professional for advice specific to your circumstances.