What is your budget and how much can you borrow?

What you can afford to borrow very much depends on your individual situation and the budget you set and stick to.

When drawing up your budget be realistic about what you need to live on. Make sure you include provision for recreational items including take-away or holidays.

Start with your income. It’s useful to consider not only how much income you have coming in but also how often that income arrives in your bank account. Income can be your wages, pension, government benefits or payments and investment income you might have.

Next consider your expenses e.g. food, rent, loans (car, credit card and personal loans), insurance costs, medical costs, education costs and transport costs (petrol, car registration and public transport). When budgeting you will also need to include some contingency for unexpected expenses like car repairs.

For more information on budgeting and sticking to savings goal, take a look at the article here.

Are you eligible for government funding?

It is worth considering if there are any government payments or discounts that you might be eligible for, including:

• $10,000 first home owners’ grants: more information here
• $20,000 first home owners grant for new homes in regional Victoria (including Bacchus Marsh): more information here
• First home buyer stamp duty exemptions (50% discount on homes worth up to $600,000 and a discount on homes worth between $600,000 - $750,000): more information here
• $25,000 HomeBuilder grant: more information here

For those people finding it difficult to save that 20% deposit, there is the option of the First Home Loan Deposit Scheme. This government initiative allows eligible first home buyers to purchase a new home with as little as 5%. More information here

Research home loan rates

You may be able to make quite good savings by comparing the interest rates offered by banks and lenders. This information is quite easily accessible as rates are published on their websites.

It can also be useful to speak to a mortgage lender or broker. When speaking to a broker check that they have the proper licence and you may want to ask about any commissions they get from banks and credit providers.

Once you have chosen a lender, you may want to speak to them about pre-approving a loan to give you more certainty around decision making.

Where do you want to live and house price research

We’ve saved the best for last! Once you’ve worked out your budget and loan options, it’s time to start researching the towns or suburbs you want to live in.

Factors to consider include whether you are close to:

• friends, family and your community;
• transport options including public transport and good road links;
• work, school or other places you need to get to regularly; and
• lifestyle and recreational facilities including parks, shops and medical or allied health centres.