October 2008
Spring is an outstanding time of the year. Longer days, warmer nights and for many of us it is the start of the real estate season. The great Australian dream of property ownership is alive and well. Whether it is a nice flat in the trendy part of town or a house with a yard and a hills hoist, there are traditionally more properties on the market this time of year. Consequently spring is when many of us buy our first home.
Despite the doom and gloom currently associated with global finances I believe there is never a bad time to buy your own home. For most of us the purchase of property and particularly our first home will be the most significant purchase we ever make. It is an important step in wealth creation and with any step in our long term financial health it needs to be done properly.
Get your finance sorted! Why spend weeks or months looking at property only to discover that you are ineligible for finance? Talk to a mortgage broker. A good broker’s service is free and they will be able to shop around and make sure you get the right deal for your situation. Most brokers have loads of lenders on their panel and can often access great specials for you. They will also take care of all the processing and administration of your loan. The application, your first home owners grant and even dealing with the bank will be done for you and for free.
Get pre-approved. This establishes your borrowing power and costs nothing. A pre-approval allows your chosen lender to check your credit history, ability to service a loan and based on these assessments make an offer of finance to you. Generally once you are pre-approved you have six to twelve months shop around. You’ll also have the advantage over other home buyers that aren’t approved. Simply put you’ll be in a position to start negotiating immediately where they might need to get their finance together.
It’s not hard to meet expenses, mostly because they’re everywhere. Buying a property is no different. You will need to save some dough. Generally speaking the larger your deposit the lower your overall costs. That said you will still need to budget for stamp duty, transfer fees, your lenders fees and the costs of your solicitor. All these costs will need to be factored into you pre-approval.
Seek out as much help and advice as you can get. Many financial and real estate institutions run seminars that are packed full of helpful hints and strategies designed to help first home buyers. Talk to people that have done it all before and seek out the advise of industry professionals. Above all else get your finance sorted. Once you have found and bought your dream home the mortgage and money side will become boring but it is important to get it right so that all you need to focus on is enjoying your new home!
Evan Davis
