Buying a home not only provides security in the form of somewhere to live, but paying off the mortgage is also a great form of compulsory saving. However, it is also one of the biggest financial decisions you will ever make, so it is important to get it right. Here are some helpful tips.
1. How Much Can You Borrow?
Your bank or mortgage broker will be able to tell you this. Be careful not to borrow so much that you don't have anything left in your budget after making your mortgage payments.
2. Have A Look At How Different Interest Rates Will Affect Your Repayments.
For example, if you are borrowing at the low end of an interest rate cycle, say around 6.5-7%, see if you can afford the repayments at the high end when they could be 8.5-9%. A lot of people have had big shocks when renewing their fixed mortgage rates and have struggled meeting the higher repayments.
3. Consider What Area You Want To live.
Do you want to be close to work, family and friends, good schools, shops etc?
4. What Type Of House Do You Want?
An apartment, villa, townhouse? Old or new? How many bedrooms? Small or large section.
5. How Does What You Want Stack Up With What You Can Afford?
You may need to make some comparisons.
6. Do Your market Research.
Work with real estate agents, but also do your own homework and get to know the market in the areas you are considering. When it comes to putting in an offer you will be well informed about how much you should be paying for the property.
7. Get Your Lawyer Involved.
Involve you lawyer before finalising the sale and purchase agreement to ensure it has correct conditions and clauses.
8. Remember That Real Estate Agents Are Salespeople.
Some are very knowledgeable, but many have only been in real estate a short time and have very little expertise.
9. Get A Valuation And Lim Report.
As part of your due diligence get a valuation and building inspection, and a LIM (a land information Memorandum from the council) to make sure you know what you are buying. Getting these reports done should be conditions in you sale and purchase agreements.
10. Choose The Right Type Of Mortgage.
Put some thought into the type of mortgage that best suits your circumstances.
11. Carry Out A Pre-Settlement Inspection.
You need to make sure that everything you thought was included as part of the deal is still there. If there is a problem then your lawyer can hold some settlement money back until all issues are resolved.
12. Are You Planning To Renovate?
If you are planning to renovate you need a detailed budget and then double it (which is usually the case). Make sure you can afford it, and that the work will be worth it to you.
Hopefully all these tips help you to make the right decision when buying your house.
By:Health Lawson
