What are tips for buying your first home?

Mr Green: What are tips for buying your first home?
I’m in my early 20’s and I still live with my parents. But I am looking for tips when buying your first home. I have a decent paying job, and I am saving for a home now. But I need to know what to look for when buying a home. I know due to the economic situation, many banks are not forcing a down payment. If this is so, then what is the best way to strategize when going through the financial aspect of it? Please provide links if possible.

Answers and Views:

Answer by Iffy
LOCATION, location and location. Price range you can truly afford, Strong foundation, mechanics updated and plenty of room

Answer by Franky D
Keep your credit clean. Do your best to put 20% down. This will prevent mortgage insurance and lower your payment. Interview at least three mortgage bankers and get a GFI (Good Faith Estimate) from each of them to compare apples to apples. Do not pay any mortgage application fees-this is how they trap you and then jack the rate.

Answer by kemperk
a; get your bank/credit union to quote you a rate and amount
b; find and interview 3 different real estate office BUYER’S AGENTS–never ever allow an agent to show you a listing of their office…………..[a dual agent is taboo for RE buyers]
c; never get overly excited about a house till you have the keys in your hand.
d; more
get it inspected by a cert inspector and buy maintenance insurance

can guide you further

Answer by MaryM
1. Research: Make sure you shop around for rates and compare different lenders and products to make sure you select the right one for you.

2. Pre-approval: Get pre-approval for the amount of money you would like to borrow – this generally lasts for three months. Having your loan pre-approved means that if you find a property you like you can move quickly.

3. Documentation:

* Pay slips
* Group certificates
* 100 points of ID
* Tax returns and financials for the past two years if you’re self-employed
* Enough savings to cover the deposit and other fees (where applicable)

4. Find your property:

* Find the right property. Location is important. Do you want to be near the beach, city, shops, medical centres, schools. Is this a property you wish to live in for a few years or will you move on quickly? What’s important to you, ie. garage, view, number of bedrooms, room to expand, backyard, etc? Make a list and be prepared to compromise on a few things.
* Hire a conveyancer to check the contract, organise pest and building inspections, strata checks, etc.
* If you’re buying at auction you will typically have to pay 10% deposit at the fall of the hammer with no cooling off period.
* Your deposit will be held in trust by the agent – any interest earnt is split between you and the vendor at time of settlement.
* If you’re buying from an offer you may be asked to pay a 0.25% holding deposit if your offer is accepted – this is usually not refundable.
* You will then usually have a five-day cooling off period, during which you can organise valuations, inspections and finalise your finance.
* Remember: The property will not be held exclusively for you until contracts are signed and exchanged and a deposit (usually 5-10%) paid.

5. Always keep your lender informed:

* Let your lender know what’s happening at all stages – the more information and documentation you can provide them with, the faster they will be able to process your loan.
* Provide your lender with contact details of your solicitor/conveyancer, vendor and real estate agent.
* If more than 30 days has passed since your pre-approval, you will need to supply your lender with:
o Up-to-date pay slips.
o Up-to-date savings/credit card/loan statements.
o Your updated assets/liabilities to confirm nothing has changed since pre-approval.
* Provide your lender with a copy of the Contract of Sale.
* First Home Owners Grant: If you are buying your first home, your lender will provide you with the forms to complete or you can apply through your solicitor/conveyancer.

6. Valuation: Your lender will organise this once you have provided them with a copy of the contract of sale. If the property is currently tenanted it may be difficult to get access to perform the valuation which may take a little longer

7. Formal approval: If all your documents have been received and processed and the valuation comes back positive, formal approval on your loan will be granted

8. Loan documents: Your lender will instruct their solicitor to send the loan documents to you, which you need to sign and return. Your lender will then liaise with your solicitor/conveyancer until settlement. Your loan will usually settle around 30-42 days after signing the contract (depending on the stated contract terms)

9. Settlement.