Buying your first home can be a very exciting and emotional step in our lives. It is only natural to have an idea of the perfect location, house design and extra features for your first home.
However, there can often be a difference between what our dream home looks like and what our first home will be. That's because quite often, what we want and what we can afford can be two different things.
As demand for property increases and house prices rise, many first home buyers are having to be more flexible when it comes to finding a suitable first home option.
It's important to remember that your first home does not need to be your forever home. Your main priority should be getting into the property market because the sooner you buy, the sooner your property can grow in value and provide you with more options in the future.
Here are some things to consider when buying your first home:
1. Consider locations within your affordability.
When searching for your new home, make sure to understand what you can afford to borrow and how much your repayments will be. Research the areas you'd like to live to get an idea of property prices.
Explore other locations if you need to. This may allow you to find a more affordable home and enable you to get into the property market with a smaller deposit and lower repayments.
Remember that buying a home will often require some lifestyle changes so you should work out what's most important to you. Is 15 minutes extra travel time to work really going to stop you from owning a home?
2. Consider smaller homes.
Okay so let's say that an alternative location is not an option for you but the homes are too expensive, then how about considering a smaller home?
Explore other property options such as townhouses and apartments. These can often be more affordable than house and land and be a great low maintenance option.
If you are highly set on house and land, then consider a smaller block of land with a smaller home. Rome wasn't built in a day and your dream lifestyle doesn't need to be either!
3. Consider buying an investment home.
If you really don't want to downsize or re-locate then why not considering your first home as an investment property?
This may allow you to purchase something affordable in a different location and allow you to still get into the property market. Over time, with the growth in value in your property and additional savings, you might be able to eventually buy your dream home.
You would however need to consider the risk of investing. For example, if the property was vacant at anytime, would you be able to afford the repayments while also paying rent?
4. Consider waiting until you can afford it.
If you really have good reason to not downsize, invest or re-locate then you could wait until you can afford it. However, keep in mind that property prices may continue to increase and interest rates could go up.
This might make it less affordable to own in the future and you may need a higher amount of savings.
The bottom line is that you will need to determine what is more important, owning a home or the location and size of the property.
Remember, your first home doesn't need to be your dream home and you may need to make some sacrifices to get into the market. Don't be afraid of adjusting to a new location or smaller property.
5. Consider the alternatives...
Let's say you haven't been able to find a home that ticks all the boxes on your first home check list... don't get down hearted!
It's important to consider all the alternative options. Compare affordable homes in different areas and determine if there are any luxuries you can live without. Try to see beyond your ideal home and think about ways that you can adapt to your first home.
Buying a home is a big step and it's not always an opportunity that comes along often in our lives. You should also consider the alternative if you decide not to buy a home. What if house prices go up? Will you be happier renting? What if you don't get this opportunity again?
Although you may have some fear, don't let fear alone hold you back from making a very exciting and rewarding step. Surround yourself with a team you can trust to support you and get the help you need when you need it.
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