Preparing to buy
Looking for your dream home or investment property can be an exciting time, but it also represents a significant and ongoing financial commitment. Be sure to prepare yourself and keep a level head. Here are some tips to consider:
- Set your budget –
You may know how much you can afford in terms of fortnightly or monthly repayments but don’t forget there are other costs.These can include:
- Loan application fee
- Building inspection fees
- Mortgage insurance
- Government fees such as stamp duty
- Solicitor fees and more.
Another important consideration is that lenders will calculate your ability to repay up to 2% above the current rate in case of an interest rate increase. You need to be aware of this “buffer” as it could affect your ability to secure finance.
- Make a list of all the essential features you require in your property.
This will help you avoid getting carried away and buying something that looks great but doesn’t meet your needs. It’s also a good idea to make a wish list of all the desired but non-essential features you would like so this can be factored into your decision making when you find them in a property you can afford.
- Secure your finance.
Talk to your bank or employ the services of a mortgage broker.
Ask lots of questions so you feel well informed. You’ll need to figure out the type of loan that best suits your needs. For instance, will you lock in a fixed interest loan or a variable one? If you are a first home owner, be sure to investigate the current government grants available to you.
- Start Looking!
It’s always advantageous to spend some time researching the area in which you intend to buy. What are the local amenities? How convenient is public transportWhat have recent properties in that area sold for? Attending several auctions is also a good way to see what’s happening in the market place and possibly prepare you for bidding at one yourself.
- Building inspection is a must.
When you find the right property make the effort to get a building inspection done. They involve a thorough examination of all accessible areas of the house or apartment to determine the overall condition and identify any defects. Each building inspection should be undertaken by an experienced professional to guarantee you have a detailed knowledge of the structural condition of the property. A comprehensive building report should also be provided after each inspection. The inspection and report will cost you a few hundred dollars but it’s money well spent and could save you thousands in the long run.
- Due diligence checklist – for home and residential property buyers –
Before you buy a home or vacant residential land, you should be aware of a range of issues that may affect that property and impose restrictions or obligations on you, if you buy it. This checklist aims to help you identify whether any of these issues will affect you. The questions are a starting point only and you may need to seek professional advice to answer some of them. View the Due diligience checklist containing links to organisations and web pages that can help you learn more.