Are you fed up with living in a rental and are thinking about whether you’re ready to purchase your first home? If you’ve thought about it, it’s crucial to be sure that you’re fully prepared before you leap. Here are a few signs that it’s time to step off of renting and start looking for your first home:
1. You Have A Stable Income
The ability to pay your mortgage on time is crucial for owning a house. If you have a track record of making rent payments on time and not missing any fees, it could be an excellent indicator that you’ll have the ability to pay your mortgage on time. A steady income and a steady job are crucial to get loan approval. They can give you the confidence to get the mortgage.
2. You’ve Saved Up For A Deposit
A deposit is among the most significant obstacles to home ownership. If you’ve put enough money to pay for the largest one, then you’re on the right way. In general, a 10% deposit is needed to be able to get rid of Lenders’ Mortgage Insurance.
If you do not have enough savings, you could still be qualified to get a mortgage with a low deposit in the event that you satisfy the lending institution’s standards for credit and income. To determine your capacity to borrow and home loan repayments, based on any amount you borrow, Try using the Home Loan Experts ‘ How Much Can I Take Out calculator.
3. You’re Ready To Settle Down
Renting can be a good option for those who move around often or who are not certain where they’d like to settle down for the long term, but should you be determined to settle down and remain in one location, purchasing an apartment can provide you with the feeling of security and stability.
4. You Can Bear The Additional Costs
The purchase of a house is accompanied by extra expenses that renters don’t need to worry about, including homeowner’s insurance, taxes, and maintenance. In the event that you’re well aware of these expenses and have incorporated them into your budget, then you’re willing to take on the financial burden of owning a home.
Opportunities For First-Home Buyers
Property Prices Have Started To Recover
The RBA halted the rate of increase in cash rates in April, bringing relief to borrowers as well as increasing confidence among buyers on the market for housing. The national Home Value Index (HVI) rose 0.6 percent in March, which was the first rise in the monthly index since April 2022. the trend is likely to remain. Experts predict that more certainty towards the close of the current rate hike cycle will boost consumer confidence, as evident in the 9.4 percent rise on the Consumer Sentiment Index reported by the Westpac Melbourne Institute in April as compared to March.
Best Time To Enter The Property Market
There are benefits for first-time home buyers who get into the market for property now. With the interest rate stabilizing and the chance of property values rising in the future, first-time buyers will benefit.
Cash Rate Is Closer To Its Peak
Recent actions and announcements from the RBA regarding the cash rate suggest that it is either at or is close to reaching its highest point. For renters who are thinking of getting into the real estate market, it could be good for them since it means they won’t have to contend with rising interest rates, and their cost to borrow might not be further inflated.
Home Prices Are Likely To Be At Or Near The Bottom
In the last year, it has seen an incredible slowdown in the market for property, which has led to a decline in home prices. However, the increase in HVI in March indicates that home prices are nearing their lowest or have attained the point of no return. This is an encouraging indicator for renters thinking of buying a house because they can purchase an apartment at a lower price and also benefit from any future price hikes.
In addition, there are grants and government programs for first-time home buyers to help homeowners afford homeownership. However, remember to think about your financial situation, your ability to qualify for loans, and your long-term objectives before making any final decisions.
Accelerating Rents And The Massive Rental Shortage In Australia
The rental market in Australia is experiencing problems. Rents have risen in a majority of areas, while vacancy rates recently sank to an all-time low. Information from CoreLogic indicates that the National Rental Index rose 2.5 percent during March as compared to 2.0 percent during the quarter ending December. The average rent across the country is now $570. This represents an increase of 10.1 percent increase in the twelve months leading up to March. This has made affordable rentals increasingly difficult to locate due to the increasing number of immigrants from abroad. The national rate of vacant homes increased from 1.6 percent to 1.1 1 percent over the months prior through March. A shortage of rental housing is driving up the value of rental properties and giving owners more leverage in negotiations with tenants. All of this is resulting in the price of renting ma, king buying more appealing.
Rents Vs. Mortgage Repayments In Each State
The following table shows the median weekly rental of all residential properties in Australia and the percentage of increase during the 12 months from March.
The table below provides monthly mortgage repayments for various-size loans that are based on low variable rates that our panel of lenders is able to provide for 30 years from April 2023. The refunds for these loans were calculated with our calculator for compensation.
Remember that mortgage payments are monthly while the median rents are weekly. Utilize this information to determine your capacity to pay monthly mortgage payments. In addition, the Rent Vs. Buy Calculator lets you enter information about the home you’d like to purchase as well as your financial situation to evaluate the costs of renting versus buying a house.
