First time home buyer. Are you ready to buy?

How do you know if you are ready to buy a home? This is a question that many first time home buyers never properly answer.
However, you can find this out by asking yourself some fundatmental questions about your stability and your ability to afford to own a home.

1. Do you have a steady source of income? First time home buyers require a solid income. Have you been employed on a fulltime basis for the last 1-2 years? First time home buyers who are casually employed require at least 12 months service with the same employer[18 months is better]. The self employed require at least 2 years tax figures and profit and loss, unless they can show a deposit in the order of 20%, as a general rule.
2. Is your current job stable? First time home buyers need to be stable in their residential address, their choice of work and even the industry they work for as these are factors in assessment for a loan.
3. Do you have a good record of paying your bills? Many younger first time home buyers have spotty credit histories and these need to be cleaned up before you ask for a loan.
4. Do you pay when due or after they are due? Have you left an address and left the bills behind too [phone, power and gas bills left unpaid all affect your avbility to obtain credit.
5. Do you have a few outstanding long-term debts, like car repayments?
6. Do you have outstanding credit card balances? These can impact on the first time home buyers ability to pay the repayments.
7. Are you a saver or a spender? First time home buyers need a savings history to get the deposit [down payment up] as well as all the costs to settle a property, including mortgage insurance. First time home owners also need to show they can afford the repayments on a mortgage, and as renting is cheaper than owning, savings will demonstrate you ability to meet these extra costs.
8. How much deposit do you have saved? As a total figure. How much is this as a percentage of the home value you want to buy? How much is this in terms of monthly salary/ies.
9. Do you have the ability to pay a mortgage every month, plus additional costs? Costs for first time home buyers, besides closing costs, can include, renovations and improvements, landscaping and gardening costs, rates and taxes and water, repairs and maintenance, and insurancesto protect the investment.

If you can answer "yes" to most of these questions, you are probably ready to buy your own home.

First time home buyers to dominate the property market

Three years ago they were waiting on the sidelines, but the president of the Real Estate Institute of NSW, Rowen Kelly, says first-time home buyers will dominate the property market this winter.
"First time home buyers were among the few winners in last year's State Government mini-budget, with increased levels of exemption from stamp and mortgage duty," Kelly says. "Since then, all the market influences have worked in their favour, creating opportunities for keen buyers."
Since State Government incentives increased last year, there has been a 25 per cent increase in market share of first-time buyers in NSW. With steady interest rates expected over the next few months and almost no competition from property investors, Kelly expects the percentage of first-time buyers in the market to increase even further.
Lee Wallace, a first-time buyer doing the house-hunting rounds over the past few weeks, says he and his partner first started looking for a home to buy in October 2002. But after a few weeks house hunting and attending auctions they decided to put their plans on hold.
As a first-time buyer, Wallace says he found the experience at that time overwhelming and he wasn't comfortable participating in a market that was moving at such a rapid pace. "Prices seemed to go up every week and places seemed to be snapped up as soon as they went on the market," he says. "A lot of properties we looked at were auctioned and we didn't feel comfortable competing with the more experienced people bidding so often we just stood back and watched while someone else got the property."
Last month, Wallace returned to house hunting and says the experience was quite different from his last foray. "There are a number of properties we have seen in our price range that we are interested in," he says. "Because there is so much less pressure, we are able to visit the properties a few times and take our time weighing all the options and negotiating with agents."
After a third inspection this weekend, Wallace plans to make an offer on a property. "I feel more optimistic than I did three years ago," he says. "If we don't get this house, I know there are a few options for us and I'm confident we will find something over the next month."
Most importantly, Wallace says he feels far more comfortable participating in the market than he did three years ago. "Buying a home is an important decision so I want to make sure I am being cautious and clever about what I buy."
Source: Real Estate Institute of NSW.