In times such as these it’s critical to get the right advice and not buy into the negativity and grandstanding going on. We’re currently helping first home buyers achieve that dream with our preferred finance partners. So, let’s delve a little deeper.
I’m going to give you a builders take on our responsibility as a key stakeholder in assisting clients, especially on the task of acquiring their new home. So, let me start by saying to you all – Why buy a new home?
There are a few things that probably come to mind straight away. Tax savings. Accruing equity. A sense of permanence. Those are just a few of the benefits that come with home ownership.
However, it’s not only the economic benefits of the Australian Dream but the benefits to your family’s security and self-worth. Home ownership is a rite of passage for Aussies -an inevitable step in our lives, just like our first day of school or tying the knot.
Buying a new home makes financial sense. Forced savings if you like, on a future redeemable asset. Unlike renting, you can start accruing equity right away and take advantage of tax benefits. Plus, there’s no need to spend money on costly upgrades and repairs. Your new home comes with brand new appliances and top-quality fixtures. Rest easy knowing everything in your new home is under warranty. Not only that. The New home smell that rivals that new car one as well!
You could be paying as much, if not more in rent than you would with a mortgage, but with no equity, tax benefits or pride of home ownership. You’ll get no return on your investment and it will never be your own home.
Did you know also that the Qld Great Start Grant still applies?
The Great Start Grant is a Queensland Government initiative to help first homeowners to get their new first home sooner. You’ll get $15,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000). You can even buy off the plan or choose to build yourself. It’s a great opportunity to buy or build a new home in our great state and there’s nothing more satisfying for us than to handover a brand-new home to a First Home Buyer, seeing that sense of pride and relief that the home is theirs.
Cavalier Homes understands the unique challenges and concerns with buying your first home, and that’s why we’ve simplified the process. Starting with our preferred banking and brokerage professionals that we work closely with. Even with credit concerns and student loan debt, our alliance partners can start you on the path to pre-qualifying for a home loan.
So here’s my essential tips for first home owners:
- Know your credit rating – websites such as mycreditfile.com.au and the like can tell you where your current rating sits and give you the tools to combat it if you have to. Repairing damaged credit takes time – and money if you owe more than lenders would prefer to see relative to your income. Begin the process at least six months before shopping for a home.
- Evaluate your Assets and Liabilities so you don’t owe too much money and your payments are up to date. But how do you spend your money? Do you have piles of money left over every month, or are you on a shoestring budget?
A first-time homebuyer should have a good idea of what is owed and what is coming in. You should understand a little bit about monthly cash flow and what you can afford to service.
- Be organised! Be very meticulous with your paperwork and getting ready for the application process. Being organised and on top of this stuff will ensure smooth sailing and a lot less stress. That means some simple bookkeeping and getting a good relationship going early with an accountant.
- Furthermore, as a tradesman or sub-contractor for most of my life, I know that the self-employed or independent contractor will need a solid two years’ earnings history to show. The Bank really is looking for reliability! Show them that you are low risk – sustained and consistent savings over a period, good credit transactions and a stable work and home life.
- Also, don’t always listen to family and friends. The backyard beer banter over the BBQ isn’t always “take it to the bank” advice. Go get a second opinion, talk to your bank or other learned professional where emotional ties aren’t familiar or biased. Worst case, use your family wisely and hit them up to be a guarantor or backer on the loan. Then you can listen to them all you like…!
Ok, this is it! You’re ready. It’s time to buy your first home.
With Cavalier Homes, the home buying process has never been simpler. Once you know your purchasing power, it’s time to narrow down your search. We can help you find your dream home, whether you’re looking for more space, a huge back yard or a great neighbourhood.
Talk to us early though. Get the conversation started about where you want to be and we can present a very accurate quote to build your chosen home within as soon as 24 hours. We will inform you and talk about all the pitfalls that can occur when buying your first home, after all, I was once there too!
We will tailor make a home to suit the land and to fit the family and the budget. We compile
all those key ingredients and can present the recipe for a successful new home purchase.
It’s hard to argue – buying a first home can be a rewarding and gratifying experience, not only emotionally, but economically.
So here’s my summary on the Rent vs Buy Riddle:
- Stability in monthly payments
- Opportunity for tax benefits
- Pride of ownership
- Potential for return on investment
- Building equity in your property, not your landlord’s
- Investing in your future
- Freedom to remodel and add your personal touches
- No stability in monthly payments
- No tax benefits
- No pride of ownership
- No return on your investment
- No equity
- No remodelling or ability to add personal touches
I AM a big believer in the Aussie Dream of owning a home. I’d be a damn fool not to. I’m a Builder! However the world needs renters too as well as landlords. Personally, I’ve always wanted to be the one who doesn’t have to rely on the Government in their old age to service their retirement.
Data from the Reserve Bank had house prices increase in the South-East Qld Property Market from 1983 to 2013 from $55k to $450k.
Average house prices have increased at the average annual rate of 8.4%. This implies that over the last 30 years property has doubled on average every 8.5 years.
A great return in my book…
A lot of savvy Australians trust property acquisitions, whether it be your first or fifth purchase. There’s strength and stability in property and getting the right advice at the right time is always going to be the best first step.
We would warmly welcome your enquiry about your first home today and look forward to talking with you soon.