Get a mortgage broker but also use your own judgement re: their advice. I didn’t get what all the fuss was about getting a broker but they essentially helped me to get a lower interest rate and no LMI when using 15% deposit. I had 20% deposit and had previously been contacting banks by myself for pre-approval. They would comb through my bank statements so had to be very careful with my spending, but with a broker, they only needed 3payslips and that was it. Broker did advise to borrow way more for investment property which I didn’t want, so stuck to my guns as I don’t want to be stressing about the repayments.
Use a buyer’s agent (BA) if you can. I wasn’t aware that some offer an option where they bid for you at the auction only for about $1300 which sounds a lot but considering how panicked I was and the desperate lengths I would have gone to get the property, it was well worth it. They saved me at least 30k and left to my own devices, at least 100k. For this option, I did my own research and I knew the market well so much so when I was talking to a few BA’s about what and where I wanted to buy, most didn’t think it could be done for what I was willing to pay. However, I was able to provide them the relevant comparators in the same market and how prices were falling, which showed I wasn’t being unrealistic.
Read your contract yourself. They buried the fact that there was asbestos in the bathrooms way into the 174 page contract, but because I read through it I was able to ask my solicitor to find out more about this. I was initially put off till I found out that a lot of properties built before 1982 would contain asbestos so I would have to deal with the issue regardless. I got quotations for how much it would cost to update the bathrooms without disturbing the walls and also for full renovations, so knew my options beforehand.
I listened to a lot of free podcasts on being a first Home buyer and much as people like to hate, the barefoot investor helped me a lot on this journey. I’ve gone from being a spendaholic to being relatively frugal so there’s some hope for people with partners that like to spend a lot. There’s quite a few podcasts that explain in great detail the whole home buying process.
I sacrificed my life for years to get the deposit and worked 2 jobs as a nurse. I hope to never have to work 2 jobs again but am grateful for the opportunities Australia has given me, because being an immigrant I’ve had to try and support myself whilst also looking after family back home so it certainly wasn’t easy for me.
I learnt to compromise. I got most of what I wanted in the property and it’s in a great location for me. I decided that if I went up to my purchase limit, I could live with an unrenovated kitchen and bathroom whilst I saved up. Thankfully it won’t be for long.
Now that I have a place, am still quite pleased to see prices falling, contrary to popular belief. Renting sucks and homes should be more affordable for everyone IMO.
@shaynaleab Well done. You've sacrificed a lot to be where you are. This post also shows that you've done a lot of research and made a well calculated decision to buy your first property.
All the best for your home ownership!
@shaynaleab Huge takeaway from point one is use your judgement esp with how much you can comfortably borrow. We went direct with a lender for an investment loan - at the time we would’ve still been eligible for FHB benefits and we were actually encouraged to buy PPOR instead to take advantage of 5% deposit instead of 20%. We would’ve been able to borrow double what we did at the time if we were purchasing PPOR (March 2021) I can’t even imagine the mortgage stress we would be under right now if we did that LOL
@dvcochran I think just having the BA present helped the REA and auctioneer to steer the owner in a particular direction and had I been on my own, they would have convinced me to pay at least 30k extra, but I was also prepared to pay 100k extra as the property was so rare.
@shaynaleab Can I ask, how does it work with payment for a buyer's agent? We're just about to buy our first home and I'm tossing up as to whether it's something we need or not.
@farmwife Im guessing it was an auction in Sydney - here they auction up to the highest bid, then pass the property in if it doesnt hit the price they want, then the REA spends days negotiating with the bidders until 1 agrees to pay the expected price (or higher). Depending on the area it usually works.
@shaynaleab I saw a broker before buying my house years ago.
If you’re going to use a broker, shop around.
The one I saw had a great reputation, but didn’t deal with a lot of banks.
I ended up walking 500m down the road, went into a local bank branch and got a loan with better rates than what the broker could offer.
@renette2013 Shopping around is always a good idea. That’s why I had been contacting banks myself to see what I could get prior to speaking to the broker.
so there’s some hope for people with partners that like to spend a lot. There’s quite a few podcasts that explain in great detail the whole home buying process.