Tips on Purchasing A Home With Us
Deciding to buy a property in the Greater Dandenong area will probably be one of the most life-changing, and perhaps daunting decisions of your life with many factors to carefully consider! That is why you should speak with our real estate experts at Biggin and Scott Dandenong. Here are all our top tips on purchasing a home to live in or investment.
With our years of experience in the property market industry we aim to make the home buying process as easy as possible.
Are you Purchasing a Property in Greater Dandenong?
This includes the following suburbs:
- Noble Park
- Endeavour Hills
Then keep on reading for our top purchasing a property tips for the first home buyer to the experienced investor.
Buying Your Property With Biggin & Scott Dandenong
There is a process buying property process and so we would like to incorporate some tips to assist you. Every buyer’s circumstances are unique, so any queries that may arise, feel free to contact our knowledgeable and experienced housing specialists to assist you.
Make Sure You’re Financially Ready
Before rushing into purchasing your dream home, ask yourself a very important question- “Am I ready to do this”. If you have itchy feet and wanderlust, then maybe that’s a good indication, that it isn’t the right time to commit.
If you think you are ready, then assess your job stability and security. As a minimum of 12 months in your job would give lenders more confidence in you and your chances of finance. If you already have children, you probably want to own a home more than ever. The banks though, are aware of the costs associated with raising children and tend to decline the amount sought substantially (sometimes up to $50,000 per child).
Evaluate Your Finances and Budget
Have you ever thought, “how much money can I borrow from the financial Institutes?” Good question! And the reason for that is there are multitude factors that contribute to the determination of the amount. Because the mortgage is such a huge financial responsibility, it’s always advisable to consult your accountant or broker, just to get a better indication of what you can or can’t afford.
Apply to get an extract of your credit history and any debts that you may have forgotten about, make sure to clear them away. If you have had any bad credit, maybe you need to wait a little bit longer before purchasing a home or investment property.
Multiple credit cards or loans to pay off? It would be advisable to try and minimise these by reducing your credit card limit, thus helping you secure a larger financial amount.
If you’re having difficulties meeting your credit payments, make sure to contact your provider to negotiate a payment schedule.
Costs Associated with Buying a House
It would help, to have an understanding of the full costs associated with buying a home. Therefore reaching out to a financial adviser, accountant, or lender is something that will help you.
Most Common Associated Costs:
• A 10-20% Deposit to secure a home loan. To avoid paying Lender’s Mortgage Insurance, 20% is required. You can acquire a home loan with a low deposit, but your mortgage insurance will be much higher
• Stamp Duty. Depending on which state you live in, will determine how much stamp duty you will have to pay.
• Legal and conveyancing fees. A good figure to estimate is between $1000 and $3000, depending on how much work is required.
• Finance and insurance costs. If the amount you’re seeking exceeds 80% of the purchase price, you will have to pay for Lenders Mortgage Insurance in order to protect the lender, if you experience any financial difficulties.
• A mortgage application, can cost anywhere between $200 and $600 depending on which lender you are with and a valuation between $400 and $500, unless the bank waived the fee.
• Building and Pest Inspection. This is essential, just to make sure that in the long run, you will not have to fork out money for something that could’ve been identified prior to purchasing. The cost varies between $500 and $700 but will provide you with peace of mind that the property is structurally sound and pest free.
Some of the continuous costs after purchasing, would be ongoing mortgage repayments, relocation costs, Council rates, strata fees, utilities home and contents insurance and mortgage protection insurance.
Attention Landlords – Extra Costs when Purchasing an Investment Property.
As a Landlord and property investor their may be extra costs involved when buying an investment property. It’s paramount to cover the following costs:
- Insurance, property management
- Land tax
- Body corporate fees
- Council and water rates
All this is on top of your interest payments if you’re borrowing. Lenders usually prefer a full 20% deposit.
Investigating Mortgages and Interest Rates
If you have your deposit ready it will be much easier for you to find the appropriate financing. You’ll need to understand the terms of the agreement before making a decision.. such terms include:
- Interest rate
- Term of the loan (usually 25-30 years)
- Whether you can redraw funds
- Can you make additional repayments and if so are there any conditions attached?
- How often is the interest calculated?
Unfortunately some people don’t have the deposit and therefore require full finance. An option to help you with this, may be using your rental history as proof of savings or by getting someone to act as a guarantor. Because it is a higher risk you’ll be required to have full insurance.
With Interest Rates you have two options – Fixed and Variable. Allow your financial adviser to help you decide which one is best suited for you. If you are budget minded, than a fixed rate mortgage would suit best. With a variable home loan, it can be riskier but gains can be made when interest rates fall and therefore it allows you to pay off your loan quicker.
Getting Home Loan Pre-Approval
It would be ideal to get a loan pre approval otherwise known as a conditional approval before searching for a home.
By providing your lender with details such as your credit report, any savings you may have, your income, any investments, they will be able to give you an answer as to how much money you may borrow.
Choosing the Suburb and Type of Property
When looking at purchasing a property you need to have a clear sense as to what you wish to purchase. A good strategy is to have a checklist with all the “must have” requirements this is an example for a homeowner that you may work from:
- Location – close to schools and work
- Easily accessible public transport
- Any future developments in sight?
- House, unit, studio, townhouse?
- Do you have a style preference? Victorian, Art Deco, modern or a renovator’s dream?
- Figure out what type of property you are seeking