12 Apr 2012
Finding the right property can be difficult and arranging finance to purchase that property can often be quite a stressful process. To save you some time, I recommend breaking the home buying process down into ‘bite size’ pieces which will hopefully eliminate some stress and heartache along the way.
Establishing what loan amount you can afford to borrow is a good starting point, as this will determine what areas and houses you should be looking at.
One of the best ways to do this is by speaking with a mortgage professional who will be able to discuss the options that different lenders can provide and which one would be best for you. These meetings are generally free of cost or obligation and can usually be done at a time and place that suits you. This will save you time as you will avoid having the same conversation with multiple lenders.
At this meeting you will also be able to establish if you qualify for Government grants or subsidies, how much deposit you will require, what the repayments will be and the amount of money you will need to meet the closing costs (stamp duty, legal fees, insurances, rates etc).
If you are finding it difficult to save for a deposit there are a number of other options you could discuss with your lender – for example the option for parents to assist their children with the purchase by using equity from their property, or purchasing the property with a parent, family member or friend.
Once you have the finance box ticked, you can shift your focus to identifying available properties that fit your financial criteria. Two of the easiest and more efficient ways to search for properties is through internet searches and by speaking with real estate agents.
Internet searches will give you a quick feel for the average price of properties in certain areas or suburbs and may narrow down your search criteria. Some may have information such as how long properties have been on the market, sales history for the area including trends in growth of property values. If you are purchasing a new home you might want to think about how far along the development is and whether prices have already increased considerably as you don’t want to end up paying for someone else’s profit.
Think about how long you intend to live in this property and whether your needs may change in the future, for example if you’re thinking of having a family. Once you have a short list of properties you’re interested in, try to visit them at different times of the day and night to get a better feel for the area, noisy neighbours, traffic etc. The street outside my first home went from a leafy quiet street on a Saturday to a highway from Monday to Friday.
If the first property is simply a stepping stone into the market you will need to consider whether it will sell well in future and has the potential for growth in value.
Next month we will look at working with real estate agents, the offer process and some key things to consider if you’re buying an existing home.
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