The majority of Australians believe only the “wealthy” can hope to achieve the Great Australian Dream of home ownership.
According to Mortgage Choice’s inaugural whitepaper The Evolving Great Australian Dream, 63.2% of all Australians believe only ‘rich people’ can afford to buy a home.
While this is a startling statistic, it isn’t surprising.
Across most markets – specifically Sydney and Melbourne – property prices continue to soar. At the same time, data from the Australian Bureau of Statistics shows wage growth stagnates. The reality is, it is becoming harder for many Australians – particularly first home buyers – to get their foot on the property ladder.
Yes, while it may becoming harder to find affordable properties to buy, it is not impossible. We have six easy steps that all first home buyers can follow to help them start their property journey sooner rather than later.
STEP 1: Save, Save, Save
Most lenders will need to see evidence of genuine savings. Have your money in the bank for at least 3 months. As a guide, aim to save at least 5% of the property’s value or your goal purchase price. With the median property price across the combined capital cities at around $570,000, a 5% deposit is approximately $28,500. Make a budget and see where the extra dollars can come from
STEP 2: The right lender – which bank is best for you
There are so many home loan products on the market. You are spoilt for choice and should find one the suits your needs. With so much to choose from your mortgage choice broker has some great tools to help you select the right loan for you. We will look at your deposit, how much you can borrow and who will view your employment status most favorably. This can make the difference between buying your dream home and having to settle for second best. These things can be looked at ahead of time and help you set realistic savings targets and timeframes.
STEP 3: Shop with Confidence - pre-approval in your pocket
Loan pre-approval lets you start property hunting knowing the maximum amount you have to spend on the property. You have confidence to buy at auction or negotiate on price. You’ll know exactly what properties are in your price range. House hunting can be time consuming and you want to be inspecting properties you have a chance of buying. Pre-approved finance can expire after 3-6 months and is not a loan
STEP 4: Be a stickler for details
Once you have found a suitable property, it is important to go through the contract with a fine tooth comb and ensure that there is enough time built in for pest and building inspections. Employ the services of a solicitor or conveyancer to complete the necessary searches. If making an offer on a Queensland property you should also request a cooling off period and ‘subject to finance’ clause.
STEP 5: Finalise your finances
Once you’ve found a property you like, it’s a good idea to get your finances sorted. To make the process as seamless as possible. Here at Mortgage Choice we will give you a clear list of the updated information we will need to secure your formal approval. This with include verifying your current income, savings and assets, as well as liabilities, including any outstanding debts, loans, etc.
STEP 6: Be budget savvy
Your local Mortgage Choice broker can help you negotiate the right loan for your needs and ensure the property settlement process is as seamless as possible. Once your property has settled, you will officially own the dwelling. Gather as much information about the property you have just purchased from the real estate agent and vendor. You can start to budget for all the costs associated with home ownership –electricity, gas, water, rates and/or strata. Your broker can also help by including these costs in your future living expenses.
Buying property is an exciting and rewarding process.
Before you say it is too hard and you will never afford to buy a home, make sure you speak with George Cremona, your local Mortgage Choice broker. We can help you every step of the way and make sure your home buying goals become a reality!
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