The process of purchasing your first home is certainly a challenging one. It can be broken down in to the following 5 steps.

• Planning
• Arranging
• Selecting
• Buying
• Settling

1. PLANNING

Most banks and lenders will need to see your savings history for the last 6 months to show that you can make the repayments.

Look around at the sort of houses you want and then look around at the sort of houses you can afford. Find out what the monthly repayment amount will be. When you know what that is, lets say $500 per week.

Start up a separate account and put aside that money every week for 6 months. This shows that you have the discipline to save and the ability to make the repayments.

TIPS

Many first time buyers are unaware the impact having a credit card, store card or personal can have on the amount you can borrow. It can mean the difference between a 3 or 4 bedroom house. It can be The secret is to reduce or limit your consumer debt to as little as possible. This includes car loans, personal loans, credit cards, store cards. Any other debt you may have. You must declare this when you apply for a home loan. If you don’t your application could be turned down because you didn’t state all of your debt.

Don’t think you can get away with it either. In Australia every time you apply for credit (including your mobile phone account) the credit provider access your credit file or makes an enquiry. S o everything is there.

2. ARRANGING

Arrange and receive approval for your loan. Get a written preapproval for finance from your bank or broker. This is free and gives you peace of mind.

Calculate the costs of purchasing a home. Different states have different costs associated with purchasing a home. Any loan over 80% of the value of the property will attract LMI. This is known as Lenders Mortgage Insurance and is calculated depending on the contract price of the property. As a general guide if you wanted to purchase a $300,000 house with a 10% deposit you would need in additional funds to cover the costs associated with the loan. Ask your bank or mortgage broker to provide you with an estimate of fees and charges.

Select a Solicitor or Conveyancer to act for you at settlement. Unless you have a conveyancing or legal background and feel you can save on this cost this is one area I would never advise people to represent themselves.

Ask your bank or Mortgage Broker if you are eligible for the First Home Owners Grant. In Queensland the amount is $7000.

TIP: Whoever is buying the property (the name/s on the contract) must NEVER have owned or had partial ownership of a property ever.

Past ownership makes you inelible for the grant. If you think you need this money to move then find out first if it will be available. Your Nova Star mortgage broker can handle the whole application for you.

3. SELECTING

Choose a suburb/area that suits you. Consider transport, schools, where you work.

Search for properties online – this is a much more convenient way to find out if you are being realistic

Make a short list of things you MUST have in your new home. For example a fence, if you have small children or a pet. A friend of mine who was 6ft 3 had to have a home with high ceilings as he would bang himself on the head and walk around bruised, not to mention the headache.

Contact real estate agents in your local area and build a rapport. Choose one or two that you are totally comfortable with.

Attend open homes – get a feel for what the market is doing.
Make a short list of properties

AND…………

SELECT YOUR HOME
Believe it or not you’ve done all the hard work now but there’s still a few more things to consider.

4. BUYING

Contact your bank or Nova star Mortgage Broker to confirm your finance is in place before you make an offer

A valuation of the property will be required

Make an offer

Order a building and/or pest inspection

Your Nova Star broker will arrange a property valuation and formal approval of the loan

If approved, pay your deposit.

5. SETTLING

Your solicitor or conveyancer will perform a final search on the property and its title

Settlement will occur on a date agreed by you, the seller and the lender – The date is always specified on the contract.

Obtain keys and take possession

Make sure your loan repayments are organised

Relax and enjoy your new property!

Tags: Guide, Home Owners

This entry was posted on Wednesday, July 23rd, 2008 at 10:03 pm and is filed under Finance, Home, Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.