Making the decision to purchase a property is an exciting time, but it can often come with a little anxiety. Don’t stress. The process doesn’t have to be daunting. If you have a plan of attack, purchasing a property can actually be an enjoyable process.
So how should you prepare?
1. Start the savings habit early
While most lenders require a deposit of at least 5% of the property’s value, bigger is definitely better. A larger deposit may help you to avoid costly Lenders Mortgage Insurance, which is charged when a home buyer borrows more than 80% of the property’s value.
Putting a savings strategy in place early on in your financial lifecycle will make it easier to obtain finance and purchase your dream home down the track.
2. Get your finance pre-approved
When it comes to negotiation property sellers are often attracted to buyers who have pre-approved finance over those who don’t. Loan pre-approval lets you head into the purchase process knowing the maximum amount you have to spend on the property, giving you confidence to buy at auction or negotiate on price.
It also saves you from looking at places that aren’t in your price range. That said, it is important to keep in mind that pre-approved finance is typically a limited time offer and it does not lock you into a loan.
3. Know what you want
Write down a list of features that the property must have, including the number of bedrooms and bathrooms you require, whether you need a covered garage for your vintage car, or perhaps a generous backyard for your Golden Retriever.
Once you know exactly what you’re looking for, you can narrow down the list of homes you wish to inspect. Don’t visit properties that don’t meet most of your requirements – unless you’re willing to spend big on renovations.
4. Save time by using professionals
A mortgage broker can take a lot of the stress out of the home buying process. They’ll be able to do a lot of the leg work for you and help you understand exactly what is required throughout the home buying journey.
They’ll also be able to help you choose the right home loan for your needs – both now and in the future.
5. Do your inspections
Once you’ve found the property of your dreams (or at least one that’ll help you on your journey), it can be a good idea to conduct pest and building inspections. Professional inspections can give you insight into whether that property is worth buying. If it’s not, that simple inspection may save you a lot of pain and money in the long run.