Buying a property can be tricky. A lot of people buying homes for the first time, unfortunately, end up falling into a number of pitfalls and problems. That's because there's a myriad of decisions and a seemingly endless well of information.
In this article, we're going to explore what you absolutely need to know when taking on your first mortgage as you buy your first time.
When Taking On Your First Mortgage, Borrow What You're Able To Afford
Many people are often tempted to take on a little more than their budget when they fall in love with a home. However, that will prove more counterproductive than anything. Doing the research can be overwhelming, though, because there are so many different loan amounts available.
Staying on track is necessary for financial insecurity to be sidestepped. Better yet, repayments can be done with little to no difficulty.
When Taking On Your First Mortgage, Get A Property Priced Reasonably, Not A Cheap Loan
When deciding on your first home, you should consider properties that you can afford. If you have to borrow money to buy your home, it will take a long time to pay off the mortgage. If you buy a home that is much more expensive than you can afford, you will most likely spend more money than you have, and that could become a problem in the future.
When Taking On Your First Mortgage, Save Up
A significant deposit will be required over time. The amount of your down payment will be the basis for quite a few purchase options you can choose. Luckily, there are several different ways you can come up with the funds:
1. Combined Income
This may be the most important aspect of it all. You and your partner need to sit down and add up your income. That way, your household budget will be established and you'll be able to know how much you can work with. Include items such as:
- Household expenses
- Return on share investments
- Salary or wage payments
You may want to create a budget for your household. This budget should include all spending from the previous month including rent, bills, payments, and any other relevant activities. You may also want to include estimated expenses in the next month. Keep in mind that it is recommended that your mortgage payments shouldn't go beyond 25% of what your monthly income is.
2. Track Spending
Some apps, such as Money Brilliant, Pocket Book, and Spendee can help you track your expenses throughout the month. This is worth taking a look at your spending habits and looking for ways to cut costs. Examine subscriptions, dining out or buying things that you don't need.
Conclusion
Buying a home for the first time can be incredibly fun and for a lot of people, it's a huge milestone. It can be worrisome or overwhelming given all the work that goes into it, but it doesn't have to be. It's important to ensure that a first-time mortgage is affordable and to save up for the deposit.
Need a mortgage broker in Sydney? Contact Wealthy You today! We’ve been servicing Sydney for nearly 10 years, which allows us as an Australian mortgage company to meet your particular financial needs.
