Buying Property?

Are you in the market to buy property? Make sure you consider these 7 checkpoints!

1) Bigger deposit, better position

While some lenders can offer loans for owner occupy residential with a deposit of 5% of the purchase price, saving around 20% can offer you big benefits:

• Access to a wider pool of lenders and products
• You need to borrow less money overall
• It’s a clear sign to potential lenders that you’re good at managing money.

Don’t panic if you are short of 20%! With low interest rates the deposit size is the primary affordability problem in 2021, and yes, we have multiple potential options and solutions to this dilemma.

2) Know your credit rating

Lenders use your credit rating to judge your character. Credit file history is closely linked to the success of home loan applications, so understanding what makes up and affects your credit rating is important for any homebuyer.

Recent changes to what is reported on your credit file, including a 2 year record of any late payments on debt, has this more critical than ever.

Request a copy of your personal credit file (not just your score) and review it. Go direct to mycreditfile.com.au, look for how to order your report for free.

3) Work out what your bottom line looks like

You need to work out how much you think you can reasonably borrow and convert that to your maximum purchase price. You’ll need to take interest rates and the various fees like stamp duty, legal fees and LMI into account. You should also think about your current situation, your income and expenses, any dependents (kids or parents), and any lifestyle changes you can see coming up – like a job change or starting a family. Think about what’s likely to happen in the near future – as well as how it is right now. (Yes of course we help with that!)

4) If the home loan doesn’t fit, don’t sign up for it.

There are more things to consider with a home loan than just the interest rate. There are redraw and offset facilities, exit costs, repayment flexibility, fixed or variable interest rates, loan terms and fees to consider. Make sure you research the loan options available from multiple lenders and how they apply to your specific situation. Remember your broker is your credit advice expert in these matters, ask questions!

5) Research, research, research

Did we mention research? Often the difference between a property being a diamond in the rough and a dodgy deal is simply the buyer’s level of market knowledge. The more you know about the property market and where you want to buy, the better. Look at recent comparable property sales to account for current price volatility. Consider location, whether it’s near to shops, schools and transport. You want to be sure the area has what you need in terms of lifestyle and remember to consider your future.

6) Potential investment

Remember that sometimes the best locations for property growth are not the ‘hot’ suburbs but the suburbs next door. These often provide a cheaper entry point and greater potential for development.

Likewise, a brand new or newly renovated property will generally charge a premium for the look. An existing, lived-in home may not look as pretty, but it can be much better value and then you can add your own personality to it.

7) If you don’t have the finance, don’t make a bid

There’s no cooling-off period at auctions, once you’ve made an accepted bid that’s it. Stay on the safe side, make sure you have had expert credit advice / pre-approval to go to auction. If you make an offer subject to finance you can negotiate without worry, but real estate agents will want to know you have been to a broker to take your bid seriously.

Buying a home is a long-term investment, keep these tips in mind to help get it right!

If you’d like more information give us call.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Telephone: 03 9723 0522

Email: integrityone@iplan.com.au

Integrity One Facebook