Balancing immediate and future needs when buying a home can be a fine juggling act. If you’re ready to make your next home-buying move, we’ll help you stay on track with tips to help you map out your goals and keep a lid on your finances.

Map out your goals

Plan for the short term

Coming up with a plan for your home owner journey is a must. First, take baby steps: work out what you want to achieve over the short-term (one to three years) and mid-term (three to five years). Make sure your goals are realistic, and that your results can be measured.

Family dynamic comes first, says Greville Pabst, Executive Chairman of WBP Property Group. "Consider how your family dynamic may change in the next five to 10 years. Will you have children or will you become an empty-nester?"

"Proximity to quality education is going to be a key consideration," says Pabst. If you have school-age children, you'll want your next home to be close to potential schools.

“Some top-performing public and private schools restrict enrolments to specific zones. So if it’s a key consideration for you, being in the right location can give you a sense of relief about getting entry into the school zone of your choice."

On top of school zoning, don’t forget to consider preferred community and lifestyle factors around you – or what Pabst calls 'village life'.

Plan for the long term

Long-term goals are about the larger seven-to-ten-year period. Where you're at now – whether it’s starting a family or approaching retirement – will have an impact. "If your current home is too much to maintain, think about downsizing or moving close to your family," Pabst says.

Sustainability will become more important, he says, so consider an energy-efficient home to ward off rising energy costs. "Modern design means we’re now spending most of our time at the rear of a dwelling in kitchen, meal, living and family rooms. It's important these rooms are not facing west, as they’ll cost more to cool." Learn more about sustainability and passive design.

Tick off important to-dos

Determine your borrowing power

It's natural when upgrading to want a new home with all the bells and whistles. Stay focused. Figure out how much you can borrow, as well as how much you can comfortably repay – both will have a big impact on the type of property you'll buy and where it’s located. To begin your borrowing prep, make sure you know your property's real value, and find out the real cost of selling your property.

Factor in family expenses

As your family grows, so too should your budget for changing needs. School fees will increase, you'll be entertaining a growing circle of schoolmates, friends and family, and there could be other significant expenses such as dental bills and music lessons.

Consider irregular costs

In addition to day-to-day living expenses such as groceries and transport, utility bills, council rates, and mortgage repayments, be sure to take other types of unplanned or infrequent expenses into account. A good way to do this is to consider seasonal spending – like Christmas gifts and holidays – and go over expenses from the past year.

Build backups into your budget

Even the best-laid plans can go awry. Make sure your budget has the flexibility to deal with unexpected expenses such as interest rate fluctuations, home repairs, illness or injury.

Spend wisely on your new home

"Look at where you’ll spend money, rather than what most people do, which is look at where their money went," says Michael Yardney, Chief Executive Officer at Metropole Property Strategists. "In other words, plan your spending and delay gratification."

Explore the option of fixing the interest rate on part of your loan

A split loan lets you manage some of the risks of rising interest rates, while still being able to make extra repayments. “This will add certainty to your cash flow,” says Yardney.

Find out if an offset account is the right option for you

"Depositing surplus funds, savings or a financial windfall into an offset account associated with your home loan can help save you money," says Yardney. "This money remains yours and can be withdrawn for a rainy day." Since not all mortgages include an offset account feature, talk to a NAB home loan specialist about your options.

Compare your needs versus wants

Decide on needs that can't be compromised

Think through your most important home-buying considerations. Are you after an easy commute to school and work? Do you need a good floor plan that doesn't require altering? Does it fall within your budget? “Make a list of your ‘must haves’ and ‘optional extras’, and then determine what your budget can cover,” says Pabst.

Keep your mortgage serviceable, even in an emergency. Ensuring your new home stays within budget will help keep you on track. Get tips on buying an affordable home, including what you can afford to borrow and repay.

Narrow your location to suburbs, areas and even specific streets

Your next home may not be your ‘forever home’. Instead of your dream suburb, search in emerging suburbs with similar features. Known as ‘bridesmaid suburbs’, these are often areas next to a recently gentrified area with established housing, transport and community facilities.

"Start with an area you already like, and think about why you like it," says Kylie Davis, head of Marketing, Property Solutions & Content at CoreLogic. “Look at the median sale price in that market and understand that it's the middle price. If it's too high, then you need to move away from that area until you get to a median price that’s more workable for you."

Once you’ve found the right area, look for the right street. "Getting the suburb right is just one attribute that determines value and good home selection," says Pabst. “Once you have the suburb, you need to select a street."

Think about the lifestyle you want

Consider what's in the area now, especially transport. "Ideally you should be able to access at least one mode of transport within reasonable walking distance from your home," says Pabst. There should also be good services and facilities such as medical centres, parks, restaurants and shopping villages.

Upcoming shopping centres, planned transport routes and other new services can point to the potential of a suburb. But Pabst says, "It’s important that the suburb has existing infrastructure, as it removes any speculation for a buyer. What’s promised by government and developers in new housing areas is often very different to the result."

Decide on needs that can't be compromised

Think through your most important home-buying considerations. Are you after an easy commute to school and work? Do you need a good floor plan that doesn't require altering? Does it fall within your budget? “Make a list of your ‘must haves’ and ‘optional extras’, and then determine what your budget can cover,” says Pabst.

Keep your mortgage serviceable, even in an emergency. Ensuring your new home stays within budget will help keep you on track. Get tips on buying an affordable home, including what you can afford to borrow and repay.

Narrow your location to suburbs, areas and even specific streets

Your next home may not be your ‘forever home’. Instead of your dream suburb, search in emerging suburbs with similar features. Known as ‘bridesmaid suburbs’, these are often areas next to a recently gentrified area with established housing, transport and community facilities.

"Start with an area you already like, and think about why you like it," says Kylie Davis, head of Marketing, Property Solutions & Content at CoreLogic. “Look at the median sale price in that market and understand that it's the middle price. If it's too high, then you need to move away from that area until you get to a median price that’s more workable for you."

[INSERT TEXT QUOTE: “Look at the median sale price in that market and understand that it's the middle price. If it's too high, then you need to move away from that area until you get to a median price that’s more workable for you." Kylie Davis, head of Marketing, Property Solutions & Content, CoreLogic

Once you’ve found the right area, look for the right street. "Getting the suburb right is just one attribute that determines value and good home selection," says Pabst. “Once you have the suburb, you need to select a street."

Think about the lifestyle you want

Consider what's in the area now, especially transport. "Ideally you should be able to access at least one mode of transport within reasonable walking distance from your home," says Pabst. There should also be good services and facilities such as medical centres, parks, restaurants and shopping villages.

Upcoming shopping centres, planned transport routes and other new services can point to the potential of a suburb. But Pabst says, "It’s important that the suburb has existing infrastructure, as it removes any speculation for a buyer. What’s promised by government and developers in new housing areas is often very different to the result."

Glossary

100% Offset

100% Offset is a NAB transaction or deposit account that's linked to your loan to ‘offset’ the loan principal. In other words, If your loan is $180,000 and you have $5,000 in your offset transaction account, then interest for that month is calculated on $175,000.

Repayments

The amount you need to pay at an agreed time (like fortnightly or monthly), as outlined by your loan contract.

Spilt loan

A split loan is a loan that's split into more than one loan account. For example, one could be fixed rate and the other variable.

Important information

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. NAB does not guarantee the accuracy or reliability of any information in this article which is stated or provided by a third party. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB is not providing any legal, financial or tax advice in this article. You should seek independent legal, financial, and taxation advice before acting on any information in this article.

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