Just because you’re not a first home buyer doesn’t mean buying a home is simple or straight forward. Re-entering the market can be just as involved as the first time around, and becoming a home owner again can seem like an impossible goal.
But while you might not be eligible for the First Home Owners Grant, there are ways you can overcome the challenges and get the keys to the door for the second time.
Here are some tips that could help you make a fresh start sooner.
Find out what you need to get started
If you’ve only just started to think about buying again after a long stint renting, you might be surprised at how much houses cost to buy – and how much you’ll need to cover fees, charges and a deposit.
Finding out how much you’ll need to get into the market again is a good way to assess how close you are to making the move into home ownership.
There are plenty of online loan calculators which can give you an idea. You’ll need to know your income before tax, credit commitments (including credit card and store cards limits) and debt commitments (including personal and car loans).
Find out what you need to keep going
Having a home means having regular loan repayments which may be more than the rent you’re paying now. You can use an online calculator for an estimate of how much you’ll need to repay each month. But that’s not the only cost to factor in to your budget.
You’ll need to be ready to cover increases to your loan repayments if interest rates go up, unless you choose a HomeStart loan with the Repayment Safeguard
. Our Repayment Safeguard will help make your repayments more predictable.
We work out your initial repayments based on your financial situation, not just interest rates. Usually, the only change will be an adjustment for inflation once every 12 months. So if interest rates go down, you’ll pay your loan off faster. If they go up, it’ll take longer. Either way, you’ll stress less.
Some financial advisors, such as The Barefoot Investor Scott Pape
, recommend factoring repayments as if interest rates were at 10% to give you a buffer if rates do rise. This has the bonus of helping to pay your loan off more quickly, saving you on interest payments over the life of the loan.
As a home buyer, you will also be responsible for paying council rates, emergency service levies and water bills. These can vary greatly depending on which council area you live in and what concessions you might receive. It’s a good idea to call the council in the area you’re looking to buy to get an indication of how much you’ll need to pay.
Look at all your options to start sooner
If you’ve done your research and it looks like breaking back into the housing market is a long way off, don’t give up! There’s lots of ways that you can make that ‘one day’ happen sooner. Here’s some ideas to help find a home loan which will give you a head start.
- Is there a low deposit option you’re eligible for?
- Does the financial institution you’re talking to accept good rental history in lieu of savings evidence?
- Is there a cheaper property you can find on the affordable property locator?
- Are you eligible for a ‘jumpstart’ loan to up what you can borrow?
Can you find an option with cheaper fees upfront? For example, Lenders Mortgage Insurance can cost you thousands, but there is an alternative
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