For most Australian’s buying your home is the biggest investment you will make that is why is it is paramount you structure things the right way which could end up saving you thousands.
It can be an overwhelming experience, especially when it comes to finding the right loan at the right rate with the right structure. There are so many options for you to consider including your personal circumstances, your financial status, how much can you borrow, what are your goals in the next few years.
These factors are all very important when it comes to the type of structure you have in your loan, some of you may want to think about what will happen if you take time out from work to raise a family, others may want to use this home as a stepping stone and move into a larger property.
Your circumstances are all different that is why we have put together this article to help you make smart choices when it comes to your biggest investment after all knowledge is power.
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. Are you looking to buy this home for maximum growth purely as an investment or are you buying this property because you love it and it is a forever home.
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. If you are not sure investing in the help of a buyers agent can have you thousands in the long run because they often have insights into growth areas, they understand your long term goals and are excellent negotiators helping you secure a property faster. As you know with such a hot property market it is crucial that you get into the market sooner as the longer you wait the higher the prices climb. Many first home buyer find this a hurdle to get into the market.
It is important to get your finances in check some lenders will offer loans if you have saved less than the usual 20 per cent deposit it is essential the you can show the lenders 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. Your broker can help you find ways to minimise your costs helping you get that loan and property faster. Having a broker on your side can often mean the difference between not getting the loan and securing a loan.
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
Just like you hire a mechanic to service your car, an accountant to do your taxes and a hairdresser to cut your hair having the support of an expert makes all the difference. With so many things to consider, getting professional help is highly recommended.
There are many experts in the industry and it is in your best 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.
Find an Scarlett Financial Wealth Consultant, Finance Broker or Property Buyers Agent for the best expert advice about buying your first home.