To help you determine when the right time to buy property is, we compiled a list of other questions that you should ask yourself before heading down the path to property ownership.
Question 1: Are you financially ready to buy?
Depending on whether this is your first property or fifth, it’s critical that you’re financially ready to buy before treading this path. So what does it mean to be financially ready?
Well, in simple terms, being financially ready means you have enough money to cover the cost of your mortgage and the other incidentals involved in buying property.
For example, do you have enough money saved for a home deposit? How much money do you have saved or locked away in home equity? As a general rule of thumb, it’s a good idea to have at least 5% of the purchase price of a property plus costs. There are many different costs associated with buying a home, including stamp duty, mortgage application fees, solicitor fees, title transfer fees to name but a few. All of these costs will need to be paid by the time your home loan settles, so you will want to make sure you have enough money to cover these expenses.
Click here to see a full break down of all of the fees and charges associated with buying a home.
Question 2: Do you have enough options to choose from?
In Australia, there are certain times of the year when more housing stock will come onto the market. Spring, for example, is a notoriously hot selling season. Sellers will list their home for sale at the beginning of Spring in the hope that they will have sold their property by the end of the calendar year. When there is more properties on the market, there is more choice for you as a buyer – which is sometimes a very good thing. Of course, more properties generally also mean more buyers and more competition. The best thing you can do is identify exactly what type of property you’re looking for and where you would like to buy, and then keep an eye on those markets all year round and wait for something you like.
Question 3: Do your expectations align with reality?
While you may love to buy a four-bedroom home with a two-car garage in the best suburb, sometimes, our property expectations don’t align with our reality. The best thing you can do is speak to your local mortgage broker about home loan pre-approval. Home loan pre-approval will give you a good indication as to what you can afford to spend on a property.
Question 4: Do you have to buy urgently?
If the answer is yes, then it’s best you speak to your broker as soon as possible. They will help you find the ideal home loan solution for your needs. If the answer is no, then the best thing you can do is take your time, do your due diligence and research the market. The more you know about the areas in which you would like to buy, the better placed you will be when it comes time to purchase a property.
Question 5: Are you waiting for the bottom of the rate cycle?
Some people will put their property purchase plans on the backburner because they are waiting for interest rates to bottom out or property prices to fall. If you’re waiting for the ideal market conditions, you could be waiting forever. The fact is, it’s nearly impossible to predict the bottom of the market. At the end of the day, the best time to buy property is when you’re financially and emotionally ready to do so. Don’t wait for the ideal market expectations. Instead, wait until you feel ready and then go for it!
Whatever your situation, the best thing you can do is speak to your local mortgage broker. They will be able to help you understand whether or not you’re in a position to buy property and will help you find the right home loan solution for your unique financial situation.