If you’re looking to buy a home in Australia, this could be the year to start planning for it.
With recent reports indicating that the property market may drop this year, many Australians may finally have the opportunity to purchase the first home or investment property that wasn’t possible in recent years.
If you already have a home loan and are selling to purchase a new family home, you can learn about what to look for when refinancing your home loan.
If this is your first time looking at a property, start by calculating your 20% deposit required to get a home loan, by comparing the value of ideal properties in the area you’re looking in.
This will be a good indication of whether you need to adjust your expectations, continue to save more, or begin looking in a different area.
Now that you have your deposit, you’ll want to start organising finance pre-approval. The first step is to choose a lender and a home loan. Three main considerations when comparing various home loan offers:
If you need assistance with comparing your options, or you don’t know where to begin, you can always speak to a mortgage broker to assist with this stage of buying a home.
If you want to buy an investment property, you’ll need an investment loan. These function similarly to normal home loans but have a few key differences, such as higher fees, higher interest rates and more strict credit requirements.
If you already have a home loan and are buying an investment property, you can learn about what to look for in an investment home loan.
After choosing your lender, the first thing you need to do is get finance pre-approval.
Pre-approval is usually valid for up to six months and is essentially a guarantee from a lender that - provided your circumstances do not change - they will lend you the money to buy a property.
Now that you know you can get approved for your loan, it’s time to make sure the property you buy is worth the money you’re borrowing and to complete the process as smoothly as possible.
The minimum you’ll need is:
To avoid any setbacks down the line, try and find the people you need to work with at the same time you’re looking for houses. That way, you won’t be rushed to find an inspector you can put your trust in, or get held up in the final, financial stages without a lawyer.
Now that you’ve sorted out all the essential, if uninspiring, aspects of the process, it’s time to have some fun.
That’s right, it’s time to search for a home, imagine yourself moving into a hundred different properties and finally seeing that dream become a reality.
Once you’ve whittled down your list of potential properties, repeat your first step and double-check the surrounding property prices to see if there’s potential to negotiate the price further - or if you’re getting a deal you should jump on.
If you want to make a quick offer on a hot property, consider making your offer conditional on:
You could also request an updated valuation on the property, though this may not always work in your favour. Always speak to a professional if you need assistance during the process of finding and purchasing a home.
Today is the day you get your home; settlement is the process of passing ownership from the seller to the buyer.
Contact your lender to confirm the funds are available and speak to your conveyancer to ensure they’re ready to help you carry out the settlement.
On settlement day:
The date of settlement will be included in the contract of sale.
It is possible to negotiate the date of settlement, but it will generally be 30-90 days from the date that your offer is accepted.
Money.com.au want to make managing money easy and fun! By giving Australians simple tools so they can make the best decisions they can about their money.
We understand that the world of finance is complex, and offer free, extensive guides on Personal Loans, Car Loans and Business Loans, along with tools like our Budget Planning Spreadsheet to help you better manage and understand personal finance.
Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.