Get a buyer mindset

From renter to homeowner. What does it mean to make the decision, to take the big step…?

A prospective tenant, a young man really keen to secure a rental property, once said to a property manager, “Would it help if I prepay six months of rent right now?”

The property rented for $500 a week, which means the renter clearly had $12,000 he could put towards a deposit.

After a few more questions, the property manager introduced the renter to two colleagues: a finance broker and a sales agent.

The renter had always hoped to be a future buyer. The future just came sooner than he had thought.

Two important things contributed to this. One was that the finance broker was able to demonstrate a range of borrowing options. The other was that he could set the renter on a path to his financial goal of having the deposit. The agent helped him fine-tune his property search and expectations, and he was quickly on the way towards paying his mortgage rather than that of his landlord.

Taking steps toward home ownership can be as simple as changing a mindset. 1. What is your financial situation?

Once you know your current financial situation, you are better equipped to make the best-informed decision moving forward.

2. Shift your mindset to becoming a homeowner when your current lease ends.

With historic low interest rates, buying is actually cheaper in many areas than renting. Research all potential areas where you might buy and live, not just the ones you are familiar with.

Once you realise that home ownership is an option, you will have a more positive attitude that just might makes things happen.

How much you need for a deposit depends on the lender and their lending criteria. Some lenders may let you borrow 90-95% of your home’s value, so you may only need to save a 5% deposit. That could be as little as $25,000 for a property worth $500,000. Other lenders may have other criteria and demand more.

3. Have a goal

Put money aside while you are renting - a goal in itself - so you might become a homeowner once that lease ends.

4. Know what assistance is available

Be familiar with all the grants, schemes and incentives available, especially if you are a first-time buyer.

6. Locating the right property

Finding the right property can be a challenge but with people like the sales agent, the finance broker and the property manager on your team, plus your own research, the right property for you will turn up.

With your finance pre-approved, you will be a good position to act quickly.

Tips on good prospects

• Properties in ‘next street/suburb out’ that still have good access to facilities. • Properties that have gone under contract but have come back on the market. • Well-maintained, but tired properties that may have been on the market for a while. • Properties that may need a bit of work provided that they give the location, more space, more yard etc that you want.