Things to think about buy a home
Embarking on buying a home can be overwhelming to say the least! We have tried to take some of the pressure away by compiling a basic check list to give you a head start in finding the right home for YOU.
Before you begin the hunt for the perfect house sit down and write a list of all of the features you would like in your new home – next to the feature mark the level of importance. No point buying a smart car if you are a family of six! Likewise you don’t want to find yourself missing one of your most important needs because you have been won over by a less important feature. Some of the things you may consider are:
· Location – schooling – shopping areas – noise
· Size – how many bedrooms – bathrooms – living areas
· Land size – no lawn to mow – acres for the cows
· Style – single storey – two storey – modern – country
· Age – new – pre-loved
· Parking – 1 car or 4?
· Heating and cooling – gas – ducted air
It would also be helpful to note down things you would NOT want.
Buying the ‘perfect’ house on a main freeway might not be ideal.
Consider things like the condition of the home.
If you are a handy person perhaps a home that requires a little handy work would not bother you, but if you are the type that would fall for the left handed screwdriver joke perhaps you need to purchase something that does not need any repairs…unless of course you are happy to pay for the professionals to do it – but be sure you factor this into your costs.
Fine tune your finances
Once you have carefully considered your wants and don’t wants, now would be the time to consider the financial aspect. Taking a few steps to clean up your financial situation will make a big difference when applying for a home loan.
Check your credit rating
Believe it or not an unpaid telephone bill from three years ago that you had completely forgotten about can create heartache and may even mean the difference between getting the home you want and missing out. You can request a copy of your credit rating by going to my credit file If you have any skeletons in the closet it would be a good idea to have them fixed up quickly.
If you can, reduce your debt or at least your potential debt. You may have a credit card with a limit of $10,000.00 but you only owe $2,000.00 – consider reducing the limit to a lesser amount. If you can clear it altogether even better!
Now look at a your income and expenses – the nasty ‘B’ word….BUDGET!
Sometimes we can forget how expensive it is to live! Write down all of your income and ALL of your expenses…there are an abundance of budget programmes available, so perhaps even use one of these to help. Don’t forget, if you are currently renting, you will now have additional expenses like council rates, water access, home insurance and maintenance. Don’t stretch yourself too far, make allowances for unexpected expenses and rate rises!
When you have worked out a figure you feel you can manage comfortably contact a professional mortgage broker to assist you in gaining a pre – approval for a home loan. Your broker will help you through the quagmire of lenders, loans and lingo of home buying.
Having a pre-approval in place will give you peace of mind. No point getting your heart set on a home you cannot afford. Speaking of not affording, don’t forget the figure you felt comfortable with when doing your budget.
You don’t have to borrow the maximum amount the lender is willing to approve. The amount they assess for living costs may be far lower than YOUR living costs.
Remember everyone who has declared bankruptcy was approved for the loan!
This you can do in the comfort of your own home..at least to start with.
Make good use of the internet real estate sites to compare properties that not only fit into your price range but also your check list.
Look at what you can get for your money, and again what is more important to YOU. As an example there may be an older, smaller home on a larger block of land in a leafy established area, but for the same money you may get a larger, new, modern home on a very small block of land in a new estate.
Narrow down your favourites and now get out of your lounge chair. Arrange inspection times, and don’t be afraid to go back for another look just to refresh your memory.
Take your check list and make a note of how each house weighs up – this will save you getting confused about what you saw where!
Time to Sign
You have found the house that you want to be your home. If you have not chosen a solicitor or conveyancer now is the time to do so. It is also the time to contact your mortgage broker to advise them of your progress. Your solicitor/conveyancer will continue to communicate with your broker.
Contact the real estate agent and make an offer to purchase the property – sharpen your bargaining skills! No doubt there will be a little to and fro negotiating, but hopefully at the end of it both you and the vendor (person selling) will be smiling. A contract of sale will be prepared noting the purchase price and your details.
DO NOT SIGN ANYTHING PRIOR TO SEEING YOUR SOLICITOR OR CONVEYANCER!
Make sure you understand the legal process in your State or Territory as they do differ, and some have been caught out by assuming they are all the same.
It is your responsibility now to arrange for building and pest inspections to ensure your beloved home is in good standing and not being held together by the gyprock. Make sure your solicitor or conveyancer receives a copy. If there are any issues, you can discuss these and they can try to negotiate a solution – any changes will be noted on the contract.
Your solicitor or conveyancer will order a title search and survey. The title search notes the ownership and history of the property, while the survey is like a map of the property that shows where the house and other structures are within the boundaries.
Meanwhile, your mortgage broker will be busily working along with the lender you have chosen to obtain a formal or full approval for your finance. The lender will generally do a valuation of the property and will be communicating with your solicitor/conveyancer ensuring they have all of the necessary legal documentation for the purchase.
Exchange of the property is when you have signed the contract, have full approval for your loan and are committing to the purchase of the property. You will be required to leave a deposit which is generally non-refundable. This can be done using cash or a deposit bond.
Now it is going to get exciting. You need to start packing and preparing for the big move. Standard settlement times are six weeks, however by negotiating through your solicitor/conveyancer, you may be able to shorten or lengthen this time frame.
It is a good idea to conduct a final inspection of your home just before settlement….don’t need any nasty surprises!
At settlement your solicitor/conveyance will need to have available the funds you are contributing towards the purchase – make sure you discuss with them exactly the amount and how it is to be paid to them ie bank cheque. Also make sure you have insured the home for the day of settlement and provide a copy of your policy to your solicitor/conveyancer.
Now is the time for a representative from your lender and your solicitor will attend the settlement with all of the required documentation. The settlement process usually takes up to two hours.
You will be advised of the completion of settlement by your solicitor/conveyancer and/or mortgage broker.
Pick up the keys to your new home!
You will now be able to collect the keys from the real estate agent and get moving!
Welcome to your new home. CONGRATULATIONS!
We hope this guide has helped you enjoy and understand the process of buying a home.