New year, new home? If this is the year you plan to get into the property market, there are a few things you can do to help you reach your home-ownership goals.
Below are five things to consider to make your property search.
The amount of money you can borrow will determine what properties you can potentially buy. This should be one of the first things you work out so you can narrow, or widen, your property search.
There are several factors that will affect how much a lender is willing to loan you. These include your income, living expenses, debts, assets, savings and the value of the property you want to buy.
The lender’s main concerns are your ability to secure the property with a deposit and your ongoing ability to make repayments.
It takes time and discipline to save for something as sizeable as a house deposit. Saving a large deposit, at least 20% of the property’s value, shows a lender your ability to save and manage money over time. This is also known as genuine savings.
Lenders will take your deposit into consideration when calculating your loan-to-value ratio (LVR). The higher the LVR percentage, the higher risk the loan is for the lender.
You can reduce your LVR by saving a larger deposit or buying a less expensive property.
A 20% deposit will also save you from paying lenders mortgage insurance.
If you’re a first-home buyer, you may qualify for incentives that will make it easier for you to get your foot on the property ladder.
The federal government’s Home Guarantee Scheme supports eligible low and middle-income first-home buyers so that they can purchase a home with a deposit of as little as 5%. The state and territory governments also offer the First Home Owners Grant and other state-specific grants and schemes.
We can help you find out what incentives you’re eligible for and guide you through the application process.
Pre-approval is an indication of what a lender is currently prepared to lend you. There’s no obligation for you to take out the loan and you still have to go through an application process to secure it.
There are several reasons why getting us to organise pre-approved finance is beneficial for your property search. Firstly, it will give you peace of mind and take away some of the uncertainty around what finance you will have access to when the time comes to make an offer.
It also shows sellers you are a serious buyer who is confident in the amount you can spend and able to move quickly to secure your dream home.
Now that you know what you can afford to buy and what incentives you’re eligible for, you can base your search around those parameters. Rather than going to dozens of open homes, you can focus your efforts on a smaller number of properties that suit your needs and budget.
Armed with your pre-approval, you can compare what your money will get you in different areas and weigh up your options. For example, would you rather buy a larger home in a more remote suburb and have a longer commute, or live in a smaller property that’s closer to work, family or your children’s school?
With your finances in order, you’ll be able to jump on the right property when you find it.
Whether you’re looking to buy your first home, your next home, an investment property or refinance to a home loan that better suits your needs, we can help.
The material on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this website is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this website are provided for illustrative purposes only. Although every effort has been made to verify the accuracy of the information contained on this website, Infocus, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.