“Let’s start at the very beginning, a very good place to start!” Maria Von Trapp – The Sound of Music
Buying your first home on the Darling Downs or Lockyer Valley and not sure where to start? A quick google search can see homes in Toowoomba with prices that range from the “renovate-or-detonate” options to the “blue-chip-real-estate”! Finding where you fit on this scale can feel overwhelming, so we recommend these three steps before you start your real estate shopping:
1. RESEARCH (Location, location, location)
Find your ideal suburb. Consider proximity to essential services such as education, medical facilities, transport, or perhaps more unique things to your lifestyle like parks and gardens, schools, or shopping. You might be willing to make compromises on some items or perhaps trade-off for others you rank of higher value. For example: a smaller block, but close to a park; or a large block, but a longer commute. This helps narrow down a price range from the outset.
TOP TIP: If the suburb of your dreams is just out of reach, look at neighbouring suburbs, as sometimes fringe dwelling properties may sometimes be cheaper but have the same/similar access to lifestyle amenities. For example, Mount Lofty vs Harlaxton, Toowoomba City vs East Toowoomba, Middle Ridge vs Centenary Heights.
2. FINANCE CHECK (Where did all that money go?)
Regardless of your ideal location, you need to fund it! As an outcome of the royal commission into lending and finance, lenders are required to undertake more checks than ever to ensure credit worthiness.
This means the first thing a lender will seek is evidence of your loan affordability. You need to show you have shown responsibility with your income – which means you need to be able to provide the following information:
- savings – lenders will require you to show consistent evidence of regular, methodical savings.
- income – detailed income information including salary sacrifice, evidence of superannuation, and payslips for all full/part time/casual hours.
- reliability – lenders want to know you can meet your loan repayments and will require details regarding your living expenses. These expenses can even include lifestyle choices like how often you dine out, petrol usage etc. They will then confirm your living expenses through your credit card and bank statements – so do not bother trying to fudge it! Straighten up and fly right. Need more help with this step? We have a FREE budget planner calculator you may find useful.
- credit history – lenders will be looking at your credit history for evidence of regular payments as evidence of your reliability. They have access to very comprehensive credit reporting and are extremely thorough.
TOP TIP: Even credit cards with a zero balance will show up as a debt and can affect your credit rating with a lender. Not sure what your credit is like? Go to www.equifac.com.au/personal for your free comprehensive credit report. From one of the major reporting companies used by lenders.
3. TAKE YOUR TIME TO CLEAN UP (AKA – get your ducks in a row!)
Many first home buyers rush off, excited to purchase, only to have the contract crash around their ears as they are unable to finance their dream. Avoid the heartache! Take time to engage in research and set up your finances for success.
This may require some time cleaning up your finances for example: cancelling credit cards, paying off small debts, establishing a better credit rating, creating consistent savings habits, and establishing a budget. This can take 3-6 months, depending on your circumstances.
Need help completing these steps? Or just feeling unsure how to proceed? Please reach out, the team are ready to chat about getting you into your own home. Our team have over four decades of experience helping people into their dreams of home ownership! We would love to help you too.
DISCLAIMER: “While parts of this article can translate for some situations with buying a home in Australia, this opinion piece is in the context of the Toowoomba Home Market. We cannot give blanket advice on loans that require tailoring to the individual’s circumstances. Please contact our team and we can help you find out how to get those finances healthy and ready to get into your very own home.”