Whether you’re thinking of buying your first home to live in, downsizing or want to upgrade to something bigger and better, a property purchase can be one of the biggest decisions you can make in your lifetime. The more informed you can be about the process, the better off your decision making will be, ensuring you are getting the best value property for your budget, the right home loan that is flexible enough to deal with any of life’s regular ups and downs and securing your financial outlook.
CONSIDERATIONS WHEN LOOKING AT A PROPERTY PURCHASE
It’s easy to fall into the trap of rushing into a property purchase, especially if it’s something you’ve never done before. It can be exciting but overwhelming, and it’s important to consider all the aspects of the process and your options before signing on the dotted line. Let’s look at some of the things you should consider when looking at buying a home.
KNOW YOUR COSTS
One of the mistakes that people often make is that they underestimate or simply overlook the costs associated with the purchase of a property, and the ongoing costs of owning and running it. Initially homebuyers normally have two types of costs with the property purchase: the fees associated with the home loan, and the costs involved with buying the property, including government charges such as stamp duty, legal, building inspection and conveyancing fees.
On an ongoing basis, there are also the costs involved in the general upkeep and maintenance of the property. These can include:
- Strata fees: if the property you purchase has a body corporate, you will be likely to be paying strata fees. These generally are paid quarterly and cover ongoing expenses such as gardening and building maintenance, They will vary depending on the type of property and the facilities within it, but can range from a few hundred every quarter to several thousand dollars.
- Home and contents insurance: it is always recommended that you get home and contents insurance on your new property as soon as possible and ideally active from the date that you purchased the property. In fact lenders require at least the building to be insured.
- Council rates: every property owner must pay their local council rates, with the amount being based on the land values in the local area.
- Household bills: electricity, gas, water are standard household costs, but you may also have other bills such as internet to consider on an ongoing basis.
- Renovations: you may buy a property knowing that you’ll have to undertake some renovations after you move in, or you may wish to consider a renovation some time down the track when you’re more settled.
When you’re looking at a property purchase, the first thing you should do is work out your budget in relation to paying the upfront costs, what you can afford in mortgage repayments every month, as well as the other ongoing costs you will be faced with.
FINDING THE RIGHT HOME LOAN
Finding the right home loan when buying a property can make all the difference between experiencing stressful moments about your mortgage repayments or rising interest rates and feeling in control no matter what life throws at you. All banks and lenders offer a range of home loans that cater for individual preferences on matters such as fixed or variable interest rates, offset account options or redraw facilities. One of the best ways to work out what would be best for you is to talk to a mortgage broker such as Mortgage World Australia, as we specialise in finding the home loan that will best suit your personal circumstances, your current financial status and your goals for the future.
FINDING THE RIGHT PROPERTY
Once you’ve worked out your costs and the amount you can afford, and found the perfect home loan for you, it’s time to find the perfect property. This will mean deciding between a freestanding house, a townhouse or unit, an apartment or even off the plan property. Much will depend upon your budget and the type of area you wish to live in, as well as personal preferences. Just keep in mind that each type of property will come with its own benefits and downsides.
FIRST HOME BUYERS
If you’ve never owned a property before, then you’re considered to be a first home buyer, and you may be entitled to a number of incentives such as the First Home Owner Grant and stamp duty concessions. There is also the First Home Super Saver Scheme that was introduced in July 2017 and enables people to boost their deposits for a property through voluntary contributions to their super funds.
Every state has different requirements and incentives on offer for those who are buying a home for the first time, so it’s important to find out what you may be able to take advantage of when in the initial stages of a property purchase.
STEPS INVOLVED WITH THE PROCESS OF PURCHASING A HOME
Buying a property can be a scary process, particularly if you don’t know all the steps involved with the process. When purchasing a home you will be dealing with a few different parties such as real estate agents, mortgage brokers, lenders and solicitors.
Please see our detailed guide on the steps you need to take to purchase a property.
GENERAL ADVICE AND TIPS AND FOR PROPERTY BUYERS
Because buying a property can be challenging and time consuming, it’s best to be as prepared as you can be. Industry experts suggest that there are ways to ensure the process of a property purchase goes as smoothly as possible, including:
- Do your research: you can never be over prepared when you’re looking at buying a home, and doing your research has never been easier, thanks to the internet. Taking some time to look at factors such as different property types, different suburbs and home loan options, can give you an advantage in the market. Industry experts, such as mortgage specialists like us, can also be a goldmine of information.
- Be organised: Just as it’s a bad idea to turn up to a job interview under prepared, being dis-organised during the purchase of a property can slow it down considerably or even have disastrous consequences if paperwork is not filed correctly or on time. Have all the necessary documents you’re going to need on hand at all times, make copies of important documents and familiarise yourself with all the legal and financial requirements so you understand what you may be required to have.
- Get professional assistance when you need it: Don’t assume you’ll be able to take on the purchase of a home on your own. It’s likely you’ll need the help from real estate, legal and financial experts such as mortgage brokers, accountants or financial advisors, lawyers, conveyancers, and builders.
FREQUENTLY ASKED QUESTIONS
The following is a list of some of the most frequently asked questions that people looking to buy a property have.
Can I apply for the first home owners grant?
Generally speaking, if you and your your spouse have never owned a residential property, you are a permanent resident or an Australian citizen and are 18 years or over, you will may be able to apply for the First Home Owner Grant. As every state and territory has differing requirements for the grant, however, it is important to check your specific requirements to see if you are eligible.
Will I need a deposit?
Gone are the days when banks and other lenders would lend the full amount of a home, so it is likely that you will need a deposit, with many offering home loans with 5%, 10% or 20% deposits. To purchase a home with no deposit you would need a family member, who has sufficient equity in a property, to act as your guarantor.
Should I buy off the plan?
It can be tempting to consider buying an off the plan property (which is essentially a property that hasn’t been built yet but will be in the near future) as these can come with juicy incentives and can sometimes appear to be cheaper than existing residential properties. There is also the advantage that you will normally only need to put down a 10% deposit to secure your property, with the remaining balance due once the home is completed at settlement time. In recent years off the plan properties have attracted some criticism, with many developments actually falling in value after they are completed. As with other property purchases, a lot of research is recommended if you are looking at this path of action. It would also be recommended that you have a large cash deposit or significant equity in other property(s) if you are considering purchasing off the plan.
Do I need a pest inspection?
While not considered to be as critical as building inspections, a pre purchase pest inspection can take much of the guesswork out of buying a property, giving you a complete picture of the state of the home in relation to pests such as termites.
How do I choose the right property?
Choosing the right home to live in can be a matter of understanding your requirements as well as your personal preferences. Look at factors such as the type of suburb you wish to live in – including whether you’re happier in an outer suburb or love inner city life – how long your commute to work might be, transport and lifestyle options such as access to gyms, parks, schools and shopping.
CONTACT THE PROPERTY PURCHASE EXPERTS
When you’re looking at a property purchase it’s important to get the best possible advice you can from industry experts. Mortgage World Australia has over 17 years’ experience advising clients on the best possible home loans choices for them. With hundreds of satisfied clients and tailored advice, we are the number one choice to help you get the home you’ve always dreamed about.
Contact Mortgage World Australia today.