THE flat property market represents a unique opportunity for first home buyers to move towards the goal of home ownership.
If you don’t own a home now, and are keen to enter the market, your first step should be to prepare a simple budget.
It needn’t take too long, all you have to do is take a sheet of paper and write down details of your income and your regular expenses.
This should enable you to work out how much you can afford to spend in loan repayments - if you are renting now, factor in at least $50 a week for home ownership costs like rates, maintenance and insurance.
Try to budget for repayments of $8 a month for every $1000 or $800 a month for every $100,000 you borrow. This will give you a good safety buffer if rates rise.
Once you have decided how much you can spend on mortgage repayments you should talk to a lender to find if your present position will allow you to borrow the amounts you need – it should also show you what you have to do to qualify if you don’t now.
This may include saving a higher deposit or cancelling some credit cards.
By the time you do all this you should know exactly what you can borrow and how much it will cost - then you take on the next task which is finding your dream home.
This may take some time but it will be one of the largest outlays of money in your lifetime so don’t rush it.
Just keep in mind the key to good capital growth is finding a well located property and buying it at a bargain price.
Noel Whittaker is a director of Whittaker Macnaught Pty Ltd. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. His email is email@example.com.
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