Have you started thinking seriously about buying your own home? Buying your first property is an opportunity to establish a home for yourself and your family whilst making a sensible future investment in real estate. Understanding each step in the process of buying your home is important so you can help the transaction run as smoothly as possible. The steps listed below will give you an idea of what to expect throughout the entire buying process.
Step One: Financial Preparation
Financial preparation may be the most important step in the process of buying a home. People who don't properly prepare their finances may be disappointed when they learn that they can't afford a home that they've already grown to love.
Start preparing financially by evaluating your current household budget. Decide whether a mortgage payment would fit into your budget and remember to account for expenses that are set to crop up in the near future. Look at your savings to decide whether you have enough to pay for all of your settlement costs. Legal fees, settlement costs and a 10 per cent deposit must all be paid at the time of settlement.
Getting pre-approved for a mortgage is a great way to understand how much you can afford before you shop for your new home. Working with your Mortgage Choice broker can help you find out how much you can expect to borrow when it comes time to fill out a mortgage application.
Step Two: Looking For a Home
This is typically the most exciting step of the process for buyers. Researching, inspecting and imagining a life within each of the properties you're considering can be exciting. Having your pre-approval completed before you shop means that you will only be looking at homes that you can afford.
Spaciousness is a primary factor to consider when looking at homes. You need to make sure you have enough space for everyone in your family to be comfortable, but not so much space that you are overwhelmed by how to fill it. You should also pay attention to the style of the features of the home to decide whether updating the fixtures and furnishings should be budgeted in too.
The second main factor to consider when buying a home is its location. Questions to ask yourself include: Are the schools in the surrounding area highly rated? Will you have access to recreation options? Is the home close to your workplace?
Step Three: Offering On a Property
If you're interested in a property and are considering purchase, there's a final step to complete - so don't sign just yet! Arrange to have structural and pest inspections completed on the home before making an offer. If there are no major problems found during inspection and you love the home, then consider making an offer. Most people choose to offer an amount slightly lower than the asking price. If the house is going to auction, it's handy to know that you can always make an offer on a property prior to the auction date.
Your offer may not be accepted at first, but don't be discouraged. You have the option to make another offer on the home if you would like to negotiate, or you can move on and look at other properties. If your offer is accepted, the transaction will move to the next phase.
Step Four: Settlement
During settlement, the transaction is finalised and legal paperwork and expenses are filed. You will apply for a home loan, sign contracts and pay stamp duty during settlement. A solicitor can help you better understand the paperwork that must be filed in order for the transaction to be considered complete.
After lodging your deposit for the property, you have a short cooling-off period of a few days in case you feel you've made an impulsive decision and would like to back out. Be aware though, that when you buy a house at auction there is no cooling-off period. Make sure you do your research before the auction date to avoid regret once your deposit is confirmed.
Buying a home is an exciting opportunity, but it can also be a daunting prospect that involves going through a long and complicated process. Consulting with a mortgage broker can help you sail through the tough decisions, tricky transactions and confusing paperwork with ease.