5 Tips For First Home Buyers

You’re ready to buy your first home, but are you making a smart decision, or buying your dream home just to impress your friends?

Jeremy Cabral, publisher of Australia’s leading home loan comparison website, says, “Purchasing your first home is an exciting time and it’s easy to get distracted by other people’s opinions or feel pressured to purchase a place that will impress others or make them envious of you.

“The reality though is that first home buyers need to consider the cost of keeping up with the Joneses and whether they can afford the repayments on a bigger property in a more highly desirable area. Rushing into a decision like this can end up costing first home buyers gravely down the track.

“First home buyers are always tempted to buy their dream home first. When actually, they should consider something more in line with their current budget to get them on the first rung of the property ladder and then buy bigger once the equity on the place builds up,” he says.

Mr. Cabral says first home buyers should be aware of the following crucial factors before signing up to a home loan that may be out of their budget:

1. Budget higher than the official interest rates

Although interest rates are currently at a remarkable low in Australia, variable rate home owners are encouraged to calculate the budget for their home loan 2% higher than the actual cash rate. This will safeguard them against unexpected interest rate changes that will occur down the track.

2. Economic factors

The economy is uncertain now more than ever and jobs are not as secure as they used to be. We can no longer simply rely on the annual bonus or pay increase to cover home loan debt.

First home buyers should not factor in bonuses or expected increases to their salary when calculating their home loan budget.

3. Get an estimate of how much you can borrow

Historically couples relied on the sole earner to pay the mortgage. Those days are long gone it would seem as couples now rely heavily on both incomes to cover the home loan payments.

A borrowing power calculator is essential to ascertain how much first home buyers can borrow. Couples should base their home loan budget on one or at most 1.5 incomes to allow for any changes to their income that may occur.

The first step first home buyers should take before selecting their desired home is to calculate their budget. has launched calculators to simplify this process for consumers:

1. First, they need to calculate how much of their income they can spend on a property. Use this home loan calculator. 2. Then they need to calculate the mortgage repayments required for the loan amount and what they would have to pay each month Try this mortgage repayment calculator.

4. Don’t take the maximum loan amount

Regardless of whether the lender offers the maximum amount, buyers should be steered by their budget and borrow less than what is offered. Consider your repayment terms rather than seeking approval for the maximum home loan.

5. Home loan market growth

The home loan market has grown considerably in the last number of years. This spells good news for first home owners but can seem confusing. It’s important to take your time, compare all the home loan options available to you before signing on the dotted line.

What is your best tip for first home buyers?

July 11, 2013

Home Security Tips

“Approximately 80% of burglaries take place when the home is unoccupied, largely due to people advertising to burglars that they are away by leaving the rubbish bin out, having a mailbox bulging with junk mail or a deserted driveway,” says RACV Manager Home Security, Michael Hayes.

Don’t be a victim. Read these handy tips to help protect yourself – and your home…

    • Leaving a bin out for extended periods tells a would-be thief that you are not at home


    • If you’re away, ask a neighbour or relative to bring it in for you


    • Single women can be an easy target. Leave a pair of work boots or large runners lying around the front or back entrances


    • When outdoors, whether it be gardening or socialising, don’t leave your house open for any ‘would be’ thief to see what you have to offer


    • Draw curtains or blinds at night so thieves can’t get a ‘sneak preview’ of your contents


    • Don’t leave any large objects outside for the thief to use to gain entry to your home. Break-ins are usually committed with objects found around the home


    • Don’t just set your timer to go on at the same time every day. It won’t take long for a watching thief to realise what is going on. Plug in a few timers at different points around the home. Then when the lounge room timer goes off, the bedroom or kitchen light goes on, creating the illusion of movement in your house


    • When you buy a new TV, DVD or expensive jewellery don’t leave the empty box and receipts outside for collection. Dispose of rubbish discreetly


    • Remember that houses with high fences or large bushes provide burglars with the perfect camouflage. Make your home visible.


  • When washing, occasionally hang out men’s clothes (could use old rags or big floppy jumpers) so that ‘would be’ thieves don’t assume you live alone.

RACV Home Security consultants will be available at the RACV Home Show & Garden Expo to provide visitors with an obligation free home security quote. For more info see the RACV Home Show and Garden Expo website or call 13 28 86. Tickets available to buy at RACV Shops throughout Victoria.

July 31, 2002