Buying a house in australia

7 Financial steps to buying a house in Australia in 2024

Embarking on the journey to buy your first home is an exciting and significant step in life, filled with anticipation and dreams of creating a space to call your own. But between rising property prices and tighter budgets, many Australians believe the vision of The Great Australian Dream is long gone.

We disagree and think that buying a house in Australia in 2024 is an achievable dream! But whether you’re deciphering the language of real estate, navigating the intricacies of mortgages or sifting through home loan paperwork, there are a few things you’ll need to get on top first.

For instance, organising your financial life, planning your next moves, and having in mind your priorities are some of the very first decisions to make towards your new property goals. To help you in this journey, we came up with the first 7 most important steps to take in order to get financially ready to buy your first home.

7 essential steps to take when buying a house in Australia

1 – Organize your financial life and set your budget

Before even starting to look for a property to buy, the first and most important thing to care about is to get your finances in order. Organise your financial life by understanding your income and expenditures and how much you can afford to pay on your loan each month. This will help you determine how much you can pay for the property, and it will also help guide your searches.

This is also an important step to take when buying your first home in 2024, as one of the areas lenders consider when reviewing your application is how well you manage money.

2 – Determine if the property you are buying is for living or investing

Clarifying the type of property you are looking for is an important step once it affects your eligibility for government grants. Most of these benefits are only available for first-home buyers, however, if you find yourself outside the requirements for the grants or benefits, do not stress. Property is a long-term asset and you should always take into consideration other things such as location and lifestyle when picking your home.

If you are unsure of what government grants and benefits you may be eligible for, talk to your mortgage broker. They can help you decipher the details of these benefits and help you apply should you qualify.

3 – Understand how much money you can borrow

With the budget and goal in mind, it is now time to understand your borrowing capacity, seek loan options, and learn about the different possibilities out there. If you are buying an owner-occupied property, you are eligible to borrow up to 95% of the property’s value, depending on your annual income, living expenses, other debts, etc. However, each bank will offer different loan rates and ask for specific requirements.

The process of hunting for home loans, comparing each one, and matching it with your needs is a bit stressful and time-consuming. This is when a mortgage broker’s expertise is most welcome to save you time, money, and energy.

4 – Apply for a pre-approval

Before you start looking for houses and attending auctions, you should have a pre-approval of your home loan. This is an agreement from the bank saying that they are willing to lend you a certain amount of money, and it will not only make your offer much more attractive to the seller but also allow you to know your maximum available funds to organize the price range and focus on houses you can afford.

5 – List all costs involved in buying a property

It is also important to understand all the other costs involved in buying a house in Australia. Not only the property itself, but you also need to consider expenses such as the Stamp duty (if applicable), registration of title, legal and conveyancing fees, building and pest inspections, moving costs, council rates, strata fees, and insurance.

6 – Get ready for the deposit

Once you’ve got all your paperwork and finances ready to go, the next step is to organise your property deposit.

The deposit you will be required to pay depends on the property’s price, the government grant you are eligible to apply for, and how much money the bank will lend you. Normally, first-time buyers work with a deposit of 5%, however, always keep in mind the other costs involved in buying a house in Australia. If you wish to reduce your costs, always consider paying the 20% deposit. Additionally, you will not be required to pay Lenders Mortgage Insurance (LMI) if you qualify for the First Home Buyers Guarantee — an Australian Government initiative to support eligible home buyers in purchasing a property sooner.

Talk to your Mortgage Broker. They can assist you in understanding your ideal deposit amount.  Having this information in mind, you will be able to organise your savings and understand when you will be ready for the purchase.

7 – Finding a team of professionals to support you through the process of buying a house in Australia

We know all this information can be a bit overwhelming at first sight, and this is why we recommend you find a mortgage broker to help you organise your finances and choose the best options according to your needs.

A mortgage broker is a financial professional who acts as an intermediary between borrowers and lenders, helping Australians secure home loans. They work to understand the financial needs and goals of the borrower, shop around various lenders to find suitable home loan options and facilitate the loan application process.

Essentially, mortgage brokers streamline the complex task of buying your first home in 2024 by providing guidance, comparing home loan options and guiding borrowers through the application and approval stages.

Ready to get started? Talk to your mortgage broker at Capta Financial today

These simple 7 steps you just read are exactly what we use to do in our meetings with clients. We understand how important it is to find the right home loan in 2024, which is why we work with all kinds of borrowers, from investors to first-home buyers, to match them with the right solution. 

So if you need someone to help you start this journey, please contact us, and we will be more than happy to work with you.

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