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4 tips to buying your first home

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There’s no better feeling than achieving a goal you’ve worked so hard for – particularly if it’s for a deposit on your first home. So, where do you go from here?

Start looking

You’re happy with how your savings are tracking and you’re getting close to achieving your housing deposit goals. You may like to start looking at the market so you have a good indication of what you could potentially afford with your new mortgage. Keep in mind that you may need to make some compromises between the home you want and your budget. For example, you may decide that you are willing to forgo a third bedroom for two bigger bedrooms when comparing properties that are within your price range.

Tip: Research never hurts. Some real estate mobile apps have a historical record of previously sold properties. It can be a useful way to see what has been sold in your ideal purchase location and for what price.

  Don’t be surprised if you found the one and lose it

So you’ve found your dream home, have finance pre-approval and have made an offer. Bang! Next thing you know the real estate agent is calling you saying that another potential buyer has made a higher offer. Try to tame your competitive streak and avoid being trapped into a silent bidding war that’s outside your price range.

Tip: Try to avoid getting emotionally attached to a property. If other buyers place an offer that is beyond your budget, consider letting that one go. There are other properties on the market.

  If there are strata requirements, make sure there is enough in the kitty

Sometimes, you may find that strata contributions are higher than expected. Don’t be afraid to probe the agent about this, there may be some recent work done within the complex and the strata fund may be a little low. Does the complex have a pool, gym, extensive garden, or elevators? All of these can contribute to the cost of strata contributions.

Tip: Ask for a strata report. You can ask for a strata report, however, you will most likely need to pay for this. If you’re serious about the property, this might be something worthwhile taking a look at. Seek legal advice about whether a strata report is appropriate for the property you’re interested in.

  Be realistic about your expenses

You may find yourself falling into the trap of guessing expense numbers when filling out a mortgage application form. You might like to have a think about spending time detailing your expenses in a spreadsheet. Remember, be realistic and honest.

Tip: Get a second opinion. Consider having someone look over your expenses who does not have a vested interest in your purchase. They may see some inconsistencies or be able to help you brainstorm other expenses you may have left out.

In Summary

Buying a home can be a long process, particularly if you're searching in a competitive environment. If you're looking to get your foot in the door, consider keeping your options open. What you want may not necessarily fit your budget. Also, consider ongoing expenses such as strata and general upkeep, these will need to be factored in your budget on top of your mortgage repayments.

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Why choose IMB Bank?

Established in 1880, IMB has been helping people achieve their financial goals for 139 years. IMB offers a full range of banking solutions including home and personal lending, savings and transaction accounts, term deposits, business banking, financial planning and can arrange a wide range of insurance and travel products.

IMB has a growing branch network throughout the Illawarra, Sydney, NSW South Coast, the ACT and Melbourne. We have a lending specialist in every branch and a team of mobile lending specialists who will come to you. IMB members enjoy access to free automated phone and internet banking and a team of professionals who are just a phone call away at our locally based call centre.

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