Top tips for buying your first home in WA

Owning your own home is the great Aussie dream – and for good reason. It can set you up for life financially, while being incredibly rewarding emotionally. Nothing beats the feeling of security and stability, knowing you’re no longer at the whim of a landlord’s decision to raise the rent, or sell your home out from under you. Like any major milestone, entering the property market can seem a little overwhelming. However, these tips for first time home buyers will help you find a home with your name on it.

Tip 1: Get real about your budget

Perth and the regions are vast. Figuring out how much you can comfortably afford will help you figure out where to look, and what to look for. A mortgage broker or financial adviser will work with you to crunch the numbers factoring in purchasing costs like stamp duty and ongoing costs like council fees. They’ll also help you understand what grants and incentives you may be eligible for. Being informed is the best place to start!

Tip 2: Research your suburb shortlist

Once you know where you can afford to look, do a deeper dive into your suburb shortlist. Things to consider are connectivity to where you work and public transport. How well serviced is the area - will you have a supermarket, school and essential services nearby? If you enjoy the outdoors, do you have easy access to parks, playgrounds or the beach? If you love eating out and shopping, how easy is it to get to a major centre? Most importantly, as your first home may not be your last home, what is the area’s potential for capital growth? Are there major infrastructure projects like Metronet or new high schools planned for the area that will make it even more sought after in the future?

Tip 3: Start getting financially fit

Use the period while you are saving for a deposit to make yourself a model mortgage applicant. Try and get your credit score as high as possible – again your mortgage broker will help you with this but think things like paying your bills on time and reducing outstanding debt. Clear the credit cards, avoid Afterpay and payback any personal loans. The banks want to see that you’ll be able to pay them back, and that starts with building a track record of saving and sensible spending.

Like any fitness program, it’s easier if you have a plan. Writing down every single expenditure you make in a month will help you clearly see where your income is going - and where you can save. How many streaming services do you need? Is it worth paying $1000/year for the gym, if you only go once a month? Little savings here and there, diverted to a high interest savings account, can build your deposit and your financial fitness.

Tip 4: Apply for a mortgage pre-approval

If you managed to save a deposit of between 5% to 20% of the amount of your anticipated first home, congratulations. If you’ll be using the Bank of Mum and Dad (or Nan and Pop), you’re not alone – 40% of first home buyers will be doing the same. Once you have your deposit, you’re now ready to apply for a mortgage pre-approval.

Pre-approval helps you laser in on your search – you now have a maximum budget you can play with. A pre-approved mortgage or letter of eligibility will also make you a far more attractive buyer to sellers and in some instances, like purchasing in a Cedar Woods community, it will be required at the time of contract signing.

Tip 5: Don’t forget to factor in the fees

As part of your buying a home prep, you’ll need to set aside some funds for Stamp Duty, settlement agent and other fees. Your mortgage broker will be able to help you identify which fees are relevant for your personal situation and how much you should budget for.

Tip 6: Take advantage of government grants and assistance

The good news is there are a range of state and federal government grants available for first home buyers in WA. You’ve probably heard of the $10,000 WA First Home Owner’s Grant for new homes, but did you know you also qualify for the First Home Owner Rate? This is a concessional rate of stamp duty and it applies to both new and established homes up to $530,000, and vacant land up to $400,000.

You could also qualify for a Keystart low deposit home loan, which requires as little as a 2% deposit, or the First Home Guarantee scheme, which allows you to buy a home with as little as 5% deposit as the Australian Government goes guarantor on part of your loan.

To help you on your way in WA, we have put together a helpful Guide For First Home Buyers.