OFTEN the decision to purchase your first property involves equal measures of excitement and anxiety, and the magnitude of the process can be daunting. I encourage those considering buying property to break the process into manageable steps.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
1. Start saving early
Most lenders require a deposit of at least 5 per cent of the property's value but bigger is even better and may help you avoid costly lender's mortgage insurance. The discipline of budgeting and saving regularly is also great preparation for managing ongoing costs.
2. Explore your loan options
A home loan is likely to be the key to your property purchase. Potential property owners should have a good grasp on their ability to borrow money before they start the property search. It is crucial to set aside time with a professional mortgage broker to explore the loan types available to you.
3. Have your finance pre-approved
Property sellers may be attracted to buyers who have pre-approved finance over those who don't. Loan pre-approval lets you head into the purchase process knowing the maximum amount you have to spend on the property, giving you confidence to buy at auction or negotiate on price and saving you time looking at places that aren't in your price range.
4. Read the detail
Once you have found a suitable property, go through the contract with a fine toothcomb and ensure that there is enough time built in for pest and building inspections. If making an offer, check to see if the contract includes a cooling off period or subject to finance clause, and the settlement period suits you and your current arrangements.
5. Finalise your finance by having information on hand
For final loan approval you will need all your up-to-date financial details. This includes verifying your income, savings and assets as well as liabilities, including any outstanding debts.
6. Gather useful information from the agent and seller
Find out information about the property such as electricity and gas suppliers, when the strata or council rates are due, priority repairs or maintenance and any other costs associated with the property.