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Brief Guide to Buying a HouseSo you're thinking of buying property ... that's great news, but take care: your dream of owning your first home can quickly become a nightmare. Make sure to do your research and understand all the complexities involved in the process, beforehand. 1. Choosing the right property 1. Choosing the right propertyBuying a home is, more often than not, based on what we hear from our clients, terribly complicated and time-consuming. Planning is the key to having no regrets down the road. What to do ... and not do when searching for a property:
If you take your time and do your homework, you will feel more confident that you have found the right property, at the price that you feel comfortable paying. 2. Financial AspectsThere are several aspects when it comes to sorting out your finances for buying your property:
You should carefully assess you financial situation and desired standard of living to calculate a loan amount you can comfortably afford. You should think about you current circumstances and financial commitments, but also about any changes that may occur in the future, such as starting a family, changes in your income or variation in interest rates. Moreover, when determining how much you can afford to spend on a property, you should keep in mind not only the deposit, the loan amount (even if it is a 100% loan) or the interest, but also:
When added to the required deposit, all these expenses can amount to a fairly sizeable sum, and most borrowers are shocked at the financial commitment required. On a mortgage loan of $300,000, expect to pay approximately $15,000 in fees. With mortgage insurance, this could rise to about $20,000. For example: Legal fees: If you employ a solicitor, conveyancer or estate agent for performing the legal transfer of ownership the fees are between $600 and $800 for an average priced home; alternatively, you can purchase a do-it-yourself kit. Building Inspection: If you plan to get a building report, building inspections range from $250 to more than $2000, depending on the property size. Eligibility requirements vary greatly between institutions, but lenders generally use two criteria to work out how much they will lend you:
The lender will then calculate a maximum loan amount. Again, the amounts various financial institutions will agree to lend you may vary greatly. Sometimes the amount may be much higher that you thought you could borrow. Please consider carefully what you really need and can realistically afford. Don't allow anybody to persuade you to borrow more than you think you'll be able to comfortably pay off. Try not to spend more than one third of your gross income on mortgage repayments. Legal considerationsDuring the buying and selling process you may come across several types of contracts such as loan agreements, authorities to sell, authority to act as mortgage broker on your behalf, contract notes and contracts of sale of real estate. Take your time, READ EVERYTHING before you sign it, and make sure you fully understand its contents including all terms, conditions and fine print. Ask questions about anything unclear. If the explanation provided is still not enough, ask for professional legal advice. Also whenever possible, negotiate; many terms and conditions are negotiable between the parties. Further property resources
We hope this information will help you on your journey; if you need more information on the types of home loan products and how they suit your individual home loan needs, our mortgage brokers can help. Simply complete the brief realestate.com.au Home Loans online enquiry form and one of our mortgage brokers will be in contact with you to discuss your home loan options (our services are free of charge to you). DISCLAIMER: Information on this Internet site should not be relied upon as a substitute for professional legal and financial advice or reference to the actual legislation, specifically, the Estate Agents Act 1980, the Sale of Land Act 1962 and associated regulations . The financial information provided it is indicative only and should be qualified with the appropriate providers. More information or helpFor confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13LOAN or call our direct line on +61 2 9018 8417. |
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