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8 things first-time homebuyers need to know

By Andrew Bell

The homebuying process isn't an easy one – even for people who have done it before. If you're a first-time buyer, you have some unique challenges ahead of you, and will almost certainly have a lot of questions about how you can prepare for and move through that process with as much ease as you can.

The following tips should at least give you an outline to get everything right and find the home of your dreams – at a price you can afford.

1) Start your research well in advance

There is a lot of time and effort that you should put into finding the right home loan and property for your unique financial situation, and that's not a process you should take on lightly. It can take months – or even more – for the average person to adequately prepare to buy their first home, and you're likely in that group as well.

2) Get the calculator out

First, you need to examine your own finances: How much do you earn, how much debt do you owe, what do you have in savings already and so on are all important factors. Then you have to consider the state of the market where you want to buy, what you're looking for in a home, and what that is likely to cost. This will help you find the home that properly aligns your wants and needs within your budget.

3) Start cutting into your debts

Once you know how much you owe, it's a good idea to start reducing those balances with diligent, larger-than-normal payments. It's usually a good idea to start with the balances that carry the highest interest rates – such as credit cards – so that your balances aren't growing as quickly while you keep trying to pay them down.

4) Build a sizable deposit

Once you've got your debt reduced – or simultaneous to that effort – you should be putting as much extra money as you can each month into savings so you can make a large upfront payment to your would-be lender. The larger your deposit, the more likely you may be to be approved for a loan, and as an added bonus, your long-term borrowing costs will come down.

5) Get preapproval from a lender

It's always a good idea to make sure you and a potential lender agree on the amount you can afford to spend on a home, and having preapproval for your loan will also help you narrow your search for that just-right home. It can also make you a more attractive buyer to sellers because they know there won't be a snag in the sales process.

6) Don't set your heart on one property

When you're shopping for a home, there's always the possibility that someone with more resources also wants to buy it as well. For that reason, it's a good idea not to get your hopes up and really start "mentally moving in" until your bid is accepted.

7) Prepare for additional costs

When buying a home, there always seems to be some kind of additional cost you didn't expect, whether it's the need to raise your bid or repairs you may have to make a few months down the line. For that reason, it's a good idea to set aside some extra money to help insulate you.

8) Work with real estate and financial experts throughout

Because you're a first-timer, there's inevitably going to be an issue that arises in the homebuying process that you aren't prepared for. However, real estate professionals like those at Ray White Surfer's Paradise and financial professionals at your bank will help guide you at every step so you make all the right decisions.

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