e m o h a g Buyin S E T Y O U R G O A LS
G E T R E A D Y TO B U Y
C L O S E T H E D E A L
M O V I N G I N
Many people have a dream to buy their own home.
IT’S A BIG DECISION AND A BIG F I N A N C I A L C O M M I T M E N T . T H AT ’ S W H Y I T ’ S I M P O R TA N T TO G E T T H E D E TA I L S RIGHT. THIS GUIDE AIMS TO HELP YOU ASK THE RIGHT QUESTIONS, SEEK EXPERT A D V I C E A N D U LT I M AT E L Y B E H A P P Y WITH THE OUTCOME.
SET YOUR GOA L S
Think about what you’re looking for, what you need and what you’re prepared to pay to get what you want.
THINGS TO CONSIDER WHEN DECIDING ON A HOME
You might be able to afford a large house in a great location, but you might also want to travel, send your children to a private school or work part time. Consider carefully what you really want and what you are willing to compromise on.
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Location
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The site
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The neighbourhood
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Curb appeal
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Size and floor plan
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Bedrooms and bathrooms
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Kitchen
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Closets and storage
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Windows, lighting, heating, aspect
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Renovation or decoration potential
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Future expenses for repairs
EXTRA CHECKS FOR APARTMENT BUYERS
If you’re looking at buying an apartment or strata property you should check these additional areas:
Start your research Like any big decision, it’s important to get the facts before you start. Spend some time researching the market. Look at where you want to live, make friends with local real estate agents, check real estate websites and talk to friends and family.
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Strata policies on pets
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Restrictions on improvements
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Insurance coverage
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Disputes in progress
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How much is in the sinking fund
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Minutes of previous meetings
U N D E R S TA N D T H E M A R K E T To understand the market, you need to do as much research as possible. That way, whatever decision you make will be an informed one. It’s best to start with websites like allhomes.com.au and realestate.com.au that offer suburb snapshots and information about previous sales. Attend open homes in the area where you want to buy to get an idea of prices. Looking in areas where you are not expecting to live can offer alternatives worth considering. Create an inspection planner so you know where you are going and how long you have at each inspection (most real estate websites have a tool to help with this).
GET READY TO BUY
Getting a pre-approval
A pre-approval is a conditional approval from a lender based on your current situation. This gives you some assurance that you will be approved for a suitable loan. The pre-approval appraisal looks at your ability to service a loan by looking into your living expenses and liabilities, your credit history, your employment circumstances and how often you have moved house recently. Your Milestone Lending broker will give you a checklist of the documents you will need to provide to verify this information.
In times past, lenders were quick to offer same day approvals and generous loans, but those times have changed. These days banks and other lenders are particular about who they will lend money to and strict with their lending policies. So it’s important to work out how much you can afford to borrow before you become serious about a property. Don’t forget about hidden expenses which will eat into your deposit – see our checklist below for more information.
FACTOR IN THE HIDDEN EXPENSES >>
Stamp duty
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Bank fees to establish the loan
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Lender’s Mortgage Insurance if you have less than 20% deposit
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Removalists
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Repairs or renovations
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Furniture
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Home and contents insurance
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Rates and strata fees
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Conveyancer/ solicitor fees
THINGS TO REMEMBER ABOUT P R E - A P P R O VA L S It’s very important to note that a pre-approval is not a guaranteed loan. It’s your potential lender’s way of signalling how much they expect to lend you. This may change when you make an official application, particularly if your circumstances have changed after the pre-approval has been issued. New credit cards, car loans, changes in employment status or even a new baby can all impact the lender’s assessment of your ability to repay the loan. Pre-approvals are usually valid for up to 90 days but, depending on the lender, may be renewed to allow more time to find a property.
BEGIN IN EARNEST By now you should be familiar with the particulars of the area you are looking to buy in, understand how much properties are selling for, and have a pre-approval for a loan. So now it’s time to start looking in earnest. An important factor in buying a property is the sales method. Typically, properties are sold at auction, through private sale or treaty, or through expressions of interest. We’ve listed the differences in the box on the right. At this stage you should also seek the services of a conveyancing solicitor and discuss their services and fees. Conveyancers assist with the contract for sale and can guide you through the legal process. Most advice to buyers will also suggest you get a building and pest inspection before you make an offer on a property, but if you are buying in the ACT this is provided to you as a standard inclusion in the contract.
Finally, before you buy you should also look at whether you are eligible for bonuses like the First Home Owners’ Grant or exemptions from stamp duty. U N D E R S TA N D T H E VA R I O U S B U Y I N G OPTIONS
Auction – A public sale of property where the highest bidder is the successful buyer. Private sale/treaty – No specified closing date and usually negotiated between the buyer and vendor, helped by a real estate agent or legal representative. Expression of interest – Similar to a private sale/ treaty except that a formal written offer must be submitted by a specified date. Tender – A very formal sales process where potential buyers submit a proposal in response to the owner’s advertised tender. This is usually reserved for premium residential properties.
CLOSE THE DEAL
MOVING IN
If you are the successful bidder at auction or your offer has been accepted, you’re well on your way to becoming a home owner. Now it’s time to call in the experts. You will be asked to sign the contract and pay the deposit – a process generally known as exchange that your conveyancing solicitor can assist you with. From the date of exchange you are responsible for insuring the property, so you will need to organise home insurance as soon as possible. You also need to formalise your loan, so you will need to go back to your mortgage broker with details of the property and any other outstanding issues the lender has raised. A valuation will most likely be ordered, which is when the property is assessed by a licensed valuer. The valuation may not be the exact price that you’ve paid, depending on the circumstances, but it does determine the value the lender uses when assessing your loan. The contract will outline the settlement period, which is generally 4 – 8 weeks from exchange. During this time the legal paperwork and loan documents are prepared. Prior to settlement you should do an inspection of the property to ensure it is in the same state as it was the day you bought it. Your conveyancing solicitor will also advise you just prior to settlement about their fees and costs, so budget for these as well.
There are many websites and magazines dedicated to the moving process, but again it’s important to be prepared, spend the time to get organised, and seek the help of professional movers. Moving in can be very stressful. But at the same time, it’s such an achievement to move into your own home, so celebrate your success!
W H AT O U R C L I E N T S S AY A B O U T U S
JAKE’S PROFESSIONALISM IS FIRST CLASS…
STRUCTURE YOUR DEBT FOR A PROSPEROUS FINANCIAL FUTURE The right loan will allow you to still have it all Milestone’s approach looks at all your financial goals – not just how much you can borrow based on the standard questions. We look at your situation in detail to make sure the loan you take on meets your needs now and into the future.
Milestone’s dedicated mortgage brokers can help you with loans for: >>
Your dream home
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Your first home
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Investment properties
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Construction and renovation
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Business and commercial properties
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SMSF loans
For more information about finding the right loan for you, contact Milestone Lending Solutions on (02) 6176 3110, email us at info@milestonelending.com.au or visit our website milestonelending.com.au.
To say I was impressed with what Jake was able to achieve in regards to my loan is an understatement. When every bank and mortgage broker I went to said, ‘no’, or was only able to provide a figure well below what I needed to buy my dream home, I thankfully contacted Jake. Not only was he able to get the loan I needed, but he also guided me through the entire process. Most importantly however, were the lines of communication he kept open. He always returned calls/emails in a timely manner and was often available well outside of business hours to answer any questions. I am greatly appreciative of Jake for not only the loan he was able to secure me, but also for his professionalism and communication that was first class. S. Deane 2018
Milestone Lending Solutions trading as Milestone Financial Services ABN 68 100 591 508 is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, ABN 89 051 208 327 AFS Licence Number 232706, Level 8, 33 Alfred Street, Sydney NSW 2000, Australia. This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, Milestone Financial Services Pty Ltd and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information on (02) 6102 4333.