June 12, 2013
Often the decision to purchase your first property, whether it is a home or an investment, involves equal measures of excitement and anxiety, and the magnitude of the process can be daunting.
Borrowers who are considering buying property are encouraged to break the process into these six manageable steps:
1) Start the savings habit early
Most lenders require a deposit of at least five per cent of the property’s value but bigger is even better and may help you avoid costly Lenders' Mortgage Insurance. The discipline of budgeting and saving regularly is also great preparation for managing the ongoing costs of property ownership.
2) Explore your home loan options
A home loan is likely to be the key to your property purchase. Potential property owners should have a good grasp on their ability to borrow money before they start the property search. With the wide range of home loan options on offer, it is crucial to set aside time with a professional mortgage broker, like myself, to explore the loan types available to you, including how much you can borrow and the deposit size needed. This will help you to set realistic savings targets and timeframes.
3) Get ahead of the pack by having your finance pre-approved
Property sellers may be attracted to buyers who have pre-approved finance over those who don’t. Loan pre-approval lets you head into the purchase process knowing the maximum amount you have to spend on the property, giving you confidence to buy at auction or negotiate on price and saving you time looking at places that aren’t in your price range. Keep in mind pre-approved finance is typically a limited time offer and it does not lock you into a loan.
4) Look carefully at the contract, the devil can be in the detail
Once you have found a suitable property, go through the contract with a fine tooth comb and ensure that there is enough time built in for pest and building inspections. If making an offer on a property as opposed to buying at auction, check to see if the contract includes a cooling off period and/or subject to finance clause, and the settlement period suits you and your current living arrangements. Your solicitor or conveyancer can help with this step and may request changes on your behalf.
5) Finalise your finance by having current information on hand
After making an offer/placing a bid on a property, it is time to finalise your finance. For final loan approval you will need all your up to date financial details. This includes verifying your current income, savings and assets as well as liabilities, including any outstanding debts, loans, etc. In preparation for unconditional loan approval, your mortgage broker will provide a list of all the documentation you will need to have ready so that the application proceeds as quickly as possible.
6) Before settlement, gather useful information from the agent and seller
To help you plan your new budget as a property owner, find out information about the property such as electricity and gas suppliers, when the strata and/or council rates are due, priority repairs or maintenance and any other costs associated with the property so that you can start to shop around for the savviest deals.
Australia’s largest independently-operated mortgage broker, Mortgage Choice has a national network of hundreds of franchises supported by Group and State Offices.
Its loan consultants write almost one in every 20 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and risk and general insurances.
Mortgage Choice head office pays franchisees the same commission rate for the home loans they write, regardless of the rate paid by the lender selected by a new customer, so they work in each customer’s interests to source a product tailored to their unique needs.
So, why not let our local team find the most solution for your individual needs. Contact Irene Cujko at Mortgage Choice in Kings Langley on 02 9674 8014. Or visit www.mortgagechoice.com.au/irene.cujko for more information.