a family

The bills surge up when you start a family. If you live in a rented home, it can be hard to prioritize home-buying plans when you’re burdened by other financial obligations such as child-care. But as your family grows, so will your need for a space you can call your own.

When you’ve already saved up a considerable amount of money, that can be the first sign that you’re ready to look for a new house and land for sale in Werribee or any other place of your liking. But of course, it shouldn’t stop there — credit score, reserve funds, and plans for the future all play a role in buying a home.

1. You can afford the upfront costs

First-time home-buyers can get stamp duty concessions to reduce their upfront costs, but you need to make a no less than 5% deposit before you can own a home. If you’re borrowing more than 80% of the house’s purchase price, there’s also the lender’s mortgage insurance (LMI) to pay for.

But if you qualify for a Guarantor Loan, you can be free of the LMI. This type of mortgage allows you to have any of your family members (parents or siblings) as your guarantor, who will let you use a portion of their home as your security blanket for the mortgage.

Whether or not you’re buying a home through a mortgage plan, upfront costs will be involved, so researching is key to determine immediately if you’re truly ready to buy a home.

2. You have a good credit score

Your credit score determines your ability to pay back debts. If yours are bad, then your chances of being granted a loan are thin, so you have to postpone your home-buying plans for the meantime until your credit score improves.

On the other hand, if you have a good or high credit score, you can easily qualify for loans and your interest rates can be lower. In typical cases, mortgage providers can reduce monthly payments of debtors who have impressive credit scores.

The average credit score in Australia is 749, and the figures considered good play between 622-1,200. You can get a high score by always paying your bills on time and by not applying for several loans at once.

3. You have more than enough reserve funds

Ideally, you should have reserve funds that will be good for at least six months. This should include a budget for repair and maintenance costs, because unexpected damages may occur in your new home.

Other factors to consider while building up reserve funds are the possibilities of losing your job, getting ill, and having more children, to name a few. Also consider your monthly payments such as insurances, credit card bills, mortgage payments, etc. To figure out the exact or ideal amount you need, calculate the average of all your monthly payments for the last 18 months, and multiply it by 6.

4. You’ll stay in your new home for more than two years

moving to a new home

Mortgages typically require you to live in the home you’re buying for at least two years. You can also sell the house easier if you move out after five years, at least. Furthermore, fully paying your mortgage can take time, too, so you will get your money’s worth more if you reside in your new home for a long time.

5. You can still fulfil all your goals

After computing the total amount you need to save and realizing that you can afford a house, determine how it would affect your other goals. If you’re still under debt, then you might need to settle them first before buying a home.

Owning a house is a great achievement, which is why you need to do it right. Use these tips to make informed decisions and own a home that your family deserves.

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