What to consider before buying your first property
Are you considering buying your first property?
Before you decide to purchase there are several things to consider, including your current personal circumstances and financial status.
1 Why do you want to buy a home
Do you want to live in it, or will it be an investment property?
This will help determine which 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 for your deposit.
While some lenders will offer loans if you have saved less than the usual 20% deposit, being able to show a record of good saving habits will aid in getting your loan approved.
Then, take the time to talk to a mortgage broker about applying for pre-approval on the right type of loan, and 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 several additional costs to consider, so ask your finance broker what other payments you will face.
This can include, however isn’t limited to,
Loan establishment fees,
Legal and conveyance services,
Lenders mortgage insurance
4 Think about your future
Your current situation allows you to get a home loan, however it is very important to consider how your future will look and whether you can guarantee you can still service that loan over the next few years, it’s good to look at least 5 years ahead. Are you considering going back to study and reducing your working hours?
Starting a family and going down to 1 income?
Leaving employment and starting a business?
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 best interest to use them for tasks such as property checks, pest checks and any other legal queries. Going it alone can prove costly, unless you have a good understanding of the process so to avoid surprises down the track start by getting the right people to do the appropriate checks for you from the beginning.
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