Should the First House You Buy Be Cheap?
One of the benefits of buying your first home in Australia is being able to use the First Time Home Owners Grant. This government grant gives financial assistance to those who are buying their first home. You can use this money as part of your deposit so you don’t have to save up a full 20%. Depending on your financial situation and life goals, it may be beneficial for you to buy a cheaper first home, especially if you are just establishing yourself and don’t know where you’re going to be in a few years or if you’re going to be selling your home.
Pros of Buying a Cheap First Home
Some benefits of buying a first home that is cheaper are:
- Smaller deposit: a 20% deposit on a less expensive home is easier to save for than a 20% deposit on a more expensive home. This is especially important for those who are just starting to become financially independent.
- Less risk involved: with cheaper properties, you don’t have to worry about property value decreasing as much.
- More reward: while the property value is less likely to decrease, it’s easier to improve the property value. If you can improve it enough through simple renovations, you can sell the property at a gain.
Cons of Buying a Cheap First Home
Some drawbacks of buying a cheap first home include:
- Buying a home in rough shape: cheaper homes may have structural issues or cosmetic problems that may be overwhelming to first-time home buyers.
- May be harder to sell or rent out especially if it’s in a bad area.
At Mortgage House, we make the home loan application process easy, which is critical for first-time home buyers. Whether you decide to buy a cheaper home or a more expensive one, we will work with you to find the perfect home loan option for you.