The CEO of Aussie has highlighted seven considerations first home buyers should give before diving head first into Australia’s property market.
Earlier this month, the RBA slashed the official cash rate to a record low of 0.50 of a percentage point. According to James Symond, CEO of Aussie, first home buyers are set to benefit tremendously.
“Lower mortgage interest rates following the RBA’s historic move this month are expected to lift the activity of first home buyers,” Mr Symond said.
“First home buyers now have even greater opportunity to break into the market.”
Despite the ease, Mr Symond advised caution to those first home buyers, noting that it’s important to do a high level of research before diving into the property market.
“While there are thousands of low-rate home loan products available for first home buyers, ranging from basic loans to more sophisticated offerings, first home buyers need to be properly informed before committing themselves to a long-term financial commitment,” he said.
Before purchasing a property, there are seven things first home buyers should consider, according to Mr Symond. These are:
1. Work out how much you can afford to spend before you start. Research price ranges in the suburbs where you want to purchase and ask an expert to help you.
2. Speak with an Aussie mortgage broker to help you decide what loan product suits your needs, especially your borrowing limit. When finding the best home loan for you, check out the ongoing payments, especially in the fine print for monthly service fees and other charges, and what they could become when rates inevitably rise.
3. If you are worried about potential rises in interest rate and repayments, you could split your loan between variable and fixed rates.
4. Remember a low start-up interest rate or honeymoon rate does not necessarily mean you will be paying less for your property in the long term.
5. Make sure you can still enjoy a great lifestyle after regular mortgage repayments.
6. Get assistance and pre-approval for a loan, which Aussie can provide, so you know exactly what you can afford.
7. Be aware you can get a loan under the federal government First Home Loan Deposit Scheme, allowing property purchases with a deposit of just 5 per cent. Another allocation of $10,000 loans in the scheme is expected to be made from 1 July 2020.
“The process of buying your first home can seem daunting and complex; however, it is also one of the most exciting and financially secure things you can do in your life,” Mr Symond said.
“The better your research and prepare, the greater chance you have at achieving your goals.”