Buying your own home can be overwhelming, which is hardly a surprise given it’s the biggest investment most people make in their lives. There is so much to take in, that you can feel like you’re flying by the seat of your pants.
It pays to be prepared and to put yourself in the best standing for purchasing a property. So, what are some ways to ensure that you’re not only prepared for making your new purchase, but will make it a success?
Know where you stand financially
It’s easy to get in over your head, but the repercussions of overextending yourself when buying property are serious – creating unnecessary financial pressure on you and your household, leading to financial stress or ending up in a situation where you need to sell. Before you start looking to buy, have a serious look at your financial situation.
Consider how much you can afford in repayments in view of any foreseeable changes to your income – obviously this not always possible to know, but think about the likelihood of landing that promotion, or on the flipside, your income being reduced, even temporarily.
Don’t forget to take into consideration more than just the sticker price, acknowledge all of the costs associated with purchasing a property, such as conveyancing, stamp duty and other taxes. If you’ve got debt, this will impact the likelihood of getting a loan approval, so keep that in mind as well.
Choose the best strategy to save
By understanding your financial situation you’ll be better placed to establish a timeframe for meeting your goal. While the more you save, the quicker you’ll be in your home, it’s not always that simple.
Short-term savings may be best in a savings account or offset, however if your goal is to purchase in five years or later, an alternative investment vehicle may be the better option in the long-term.
Refine your search
Know what you want, but be realistic – who wouldn’t want that sprawling beach house, yet how many of us can afford it? Research the location you’d like to buy in and think about the size of the property and type, such as a unit, apartment or house. Be flexible, as you may need to compromise on some factors along the way.
It’s a good idea to develop a list of ‘must-haves’ and a list of ‘nice-to-haves’ – bearing in mind that these may change once you have looked at a few properties!
Know what you’re buying
Doing your due diligence ahead of the sale will pay off in the end. By thoroughly inspecting the property, you’ll have a better idea of what you’re buying and know of potential issues, such as mould or termites, that will need to be addressed immediately.
Building inspections, pest inspects and a property survey should be done ahead of the sale. If there’s nothing yet to inspect, as is the case for off the plan homes, make sure you research the builder and developer you’ve engaged with. Customer testimonials are helpful but ideally see if you can talk with a past client directly.
Arrange appropriate insurance
Home insurance isn’t a legal requirement, but it’s wise not to skip it. Arranging home insurance prior to signing the contract with the seller is a good idea, as although seller’s insurance is in place until settlement, this will provide extra peace of mind should anything go wrong.
Your lender may have rules around what insurance you need and from when, so make sure you check with them directly.
Seek professional advice
This process is new at some stage for all home buyers, which is why it’s helpful to reach out for professional advice along the way. We can answer all your questions and provide tailored advice that takes your circumstances into account as well as assistance with pre-approval and loans.
You’re not expected to know everything right off the bat, so get in touch and we can help you navigate the process and land your first home.
Speak to us for more help to ensure you’re on track for a comfortable retirement. Give us a call at 08 8211 7180 or send us an email at info@centramoney.com.au.