Before you decide to purchase your first property there are a number of things to consider, including your current personal circumstances and financial status.​....

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​1. Think about why you want to buy a home

Do you want to live in it or will it be an investment property? This can help determine the kind of loan you apply for and home you buy, depending on your short and long-term plans.

2. Research potential properties and loans

Knowing the market is crucial, so do some research on the areas you are targeting, check out auction clearance rates and recent sales, as well as price trends in the area. Once you are aware of what you are looking for and the approximate price, the next step is saving a deposit.
While some lenders will offer loans if you have saved less than the usual 20 per cent deposit, being able to show a record of good saving habits will aid in getting your loan approved.
Then, when you talk to your local MFAA Approved Finance Broker about applying for pre-approval on the right type of loan, ask for their help to work out what you can afford in terms of repayments.
 
3. Factor in other costs involved

Depending on the property, there can be a number of additional costs, so ask your finance broker what other payments you will face. This can include, but isn’t limited to, stamp duty, loan establishment fees, legal and conveyance services, utilities, property insurance, maintenance and lenders mortgage insurance .
4. Think about your future

Just because your current situation allows you to get a home loan, that doesn’t automatically guarantee that you will still be able to service it in five years’ time. Is there a possibility your role at work will change? Are you considering going back to study and reducing your working hours?

5. Get professional help

​With so many things to consider, getting professional help is highly recommended. There are many experts in the industry and it is in your interest to use them for tasks such as property checks, pest checks and any other legal queries. Going it alone can prove costly. Avoid nasty surprises down the track by getting the right people to do the appropriate checks for you from the beginning.

The array of mortgages available helps a good credit adviser to tailor a package to suit your needs. Here are just some of the options.

Fixed-rate mortgages
With a fixed-rate loan, you know exactly how much you’ll pay per fortnight or month for the fixed period of the loan (usually one to five years).

Variable rate mortgages
Repayments can change during the life of a variable-rate loan, so you may pay more or less as interest rates rise or fall. If you’re fairly sure that rates are set to fall, this is a good option.

Principal and interest mortgages
In this mortgage, you are paying the amount lent to you plus the interest.

Interest-only mortgages
With interest-only, you are paying just the interest on the loan – you are not paying off any of the original principal.

Split home loan (fixed and variable)
You can choose to have part of your loan at a fixed rate and the other part can be at a variable interest rate. If rates do fall, the interest will go down on the variable part of your loan, but you aren’t taking as big a risk should rates rise.

Redraw facility
If you have a variable-rate loan and you make extra repayments, then you can withdraw that additional money when you need to (you can’t do this on fixed-rate loans).

Land loan
A land loan lets you buy a block of land without the pressure to build on it as soon as possible. Land loans are usually variable interest for up to 30 years.

Construction loan
For buying land, building or renovating your home, a 12-month construction loan can be the best way to go. Usually, up to 90 per cent of the property value can be borrowed.

Non-PAYG loans
For self-employed people, a home loan can still be arranged using differing supporting documentation that shows your ability to service a loan and might include BAS and bank statements. You self-certify your income, which will need verification. You may be able to borrow up to 80 per cent of the property’s value.

Equity release
This loan type allows you to convert a portion of your residential property ‘asset’ into cash or an income stream while still allowing you to continue to live in your home.


To discuss which option might be best for you, contact me today on 0411 600 210.

Dale

Application & establishment fees, stamp duty + more. When they take out a mortgage, many people forget to consider the associated fees and expenses. Here are some of the extra costs that you'll need to consider when you take out a home loan.

Most lenders charge a home loan application fee. This can range from loan to loan, and covers:

• Legal contracts
• Property title checks
• Credit checks

Mortgage fees and costs

• Mortgage establishment fees – Lenders generally charge a mortgage establishment fee – a fee for setting up a mortgage.
• Property valuation – A third party often chosen by the lender, needs to determine the value of your land and improvements.
• Mortgage registration – Your Mortgage deed needs to be registered with the government.
• Mortgage stamp duty – The government charges stamp duty to register your mortgage.
• Lenders mortgage insurance – If you don't have 20% of the purchase price of the property, the lender will require you take out lenders mortgage insurance to cover the risk that you might default on your repayments.

Property fees and costs

• Building inspection fees – It's wise to have your property inspected for any structural problems or pests (e.g. termites).
• Stamp duty – Governments charge stamp duty to transfer the ownership of a property.
• Registration of transfer fee – The new owner of the property needs to be registered at the Land Titles Office.
• Legal fees – You generally need to pay a solicitor to handle the transfer of ownership of the property on your behalf.
• Home & contents insurance – Most homeowners insure their home and contents against a range of threats: burglary, fire, storm, etc. You need to insure the home while you have a mortgage.
• Life or income protection insurance – Borrowers should consider protecting the primary income earner while they have a mortgage.
• Utility costs – Connecting electricity, gas and telephone can be costly and generally involves the lodgement of security deposits.
• Council rates – Your local council charges rates to cover garbage collection and a host of other services.
• Body corporate fees – If you buy an apartment, body corporate fees are charged, and some fees can be significant – particularly if the building is in need of a major work (e.g. concrete cancer, security upgrade, new hot water system, etc)
• Maintenance costs – Don't forget to make provision for regular maintenance on your home – even if you decide not to undertake significant renovation.

To learn more about the hidden costs of buying a home, speak to me today on 0411 600 210.

Dale.

Pre-Purchase Steps
1.Firstly, find out how much you can borrow, what your loan repayments will be, how much deposit you need, and what government and other purchase costs are likely to be
2.Arrange for finance pre-approval
3.Search for suitable properties in your price range
4.Engage a Conveyancer to act for you

Purchase Steps
1.Negotiate the purchase price and sale conditions
2.Pay your 10% deposit
3.Condition the sale “subject to finance” and any other relevant conditions, such as “satisfactory building and/or pest inspection”
4.Forward a copy of the Contract of Sale ASAP to your Conveyancer and to us
5.Arrange building and/or pest inspections
6.Obtain Building Insurance Cover
7.We then manage the progress of your loan from pre-approval through to Unconditional Approval
8.Upon Unconditional Approval, Loan documents  are then dispatched by mail.

Critical Final Steps
1.Loan documents need to be signed and returned to the Lender with evidence of Building Insurance cover at least one week prior to property settlement date
2.Review all your personal insurance, income protection and life insurance
3.Your Conveyancer will arrange settlement details directly with the Lender
4.Funds to complete the purchase, including the costs involved, need to be sent to your conveyancer 24-48 hours prior to settlement
5.On the day of settlement funds, contracts and titles are exchanged
6.Collect they keys to your property from the Real Estate Agent 


I'm passionate about empowering you to achieve your financial goals. Speak to me today to get the ball rolling on the purchase of your next property!