27 Jul From Saving to Settlement: How to Buy Your First Home
Buying your first home proves to be a major financial decision so you need all the help that you can get.
You became aware of the important reasons why you should buy a home and you familiarised yourself with some of the common home loan terms. Now you finally decided to jump into the property market and buy your first home—but how do you exactly do it?
Here’s how to nail your first time:
Save for a deposit
Essentially, the more money you put down upfront, the less you’ll have to borrow. The ideal amount you’ll need to save is 20% of the property price, plus a bit more to cover the fees or extra costs such as stamp duty.
However, in case that you only have less than 20% of the purchase price, you may need to pay Lenders Mortgage Insurance (LMI) which enables the lender to lend you a larger percentage of the purchase price. This added cost protects the lender if you can’t pay it off.
There are also banks and lenders who offer no deposit home loans. Hence, you should not only just rely on one source because a slight difference on the interest rate can potentially save you a lot of money over time. Consulting a finance broker can be really useful as she can help you find a loan that suits your budget and lifestyle. As a mortgage broker myself, we have access to a variety of lenders and we can help you shop around for the most competitive deal that fits your situation no matter how much deposit you were able to save.
Secure a Loan
If you have a finance broker helping you out, securing a loan will be a breeze. At Soul Finance Group, I personally set a meeting with my clients to be able to know their financial situation and home loan needs. During the meeting, I ask questions to understand your financial circumstance. I analyse your financial conditions and devise the most efficient possible outcome to meet your needs.
Considering your financial situation and capability, I will check out the available loan products through our variety of banks and non-bank lenders. I will review which lenders’ products fit your need. I can advise you on things that are not familiar to you such as how much you can borrow and/or stamp duty. If you are eligible to a First Home Owner’s Grant, I will guide you throughout this process.
Once you’ve decided which lender you’d prefer, we will complete the application form and prepare all the necessary documents on your behalf. Your signature will seal the deal. For faster process of your application, you’ll be asked to provide supporting documents for verification purposes. We will provide you a list. For your convenience, here are the list of document requirements. For the complete home loan process, check it out here.
Look for House
House hunting can be a tedious task. The trick is to familiarise yourself with the market in your area. There are times when your expectations don’t really match your budget so it’s always a good idea to compromise. While you can’t compromise your budget, try changing your location—look out for some properties near your original desired location. Or you can consider an apartment. Choose something that is less modern or consider a renovation job. Better yet, consult a real estate agent to guide you in choosing the best property for your taste and budget.
After the purchase, you need to negotiate a settlement period. There are times this can fall between 30-90 days. You are required to pay the property price in full on the day of settlement.
Congratulations on settling a new property (which you can now finally call your own)!
Credit Representative (486927) is authorised under Australian Credit Licence 389328.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.