Six things to think about when buying a new home
Buying a home is one of the biggest investments you can make. Therefore, it stands to reason that this is also a time when you want to make sure you are as prepared as possible, and all your financial affairs are in order.
Our financial advisors have worked with numerous singles, couples and families preparing to buy a new home. Based on this work, they have put together six tips to consider that will help ensure you buy the best home for you.
Tip 1: Saving is key
If only we could all go back in time to when we were 19 years old and take advantage of the saving deposits that existed, look into Government assistance, and set our current selves up with multiple investment properties.
These days it’s just as important to look into the types of accounts that work for your situation, to ensure you’re saving the most you can. The more money you can put forward as a deposit, the easier it will be to manage your loan.
If you’re looking to buy property quite soon, a cash account may be the best option, whereas a term deposit or shares may help those who have a longer timeframe build up more. If you’re not sure, a financial planner can help lay out the best options for you.
Tip 2: Set yourself up for realistic house goals
Before hitting the open houses, first contact a bank or mortgage broker and find out how much can can borrow. You also have to consider factors such as whether you need to pay mortgage insurance, how much deposit you’ll have or want to have, any additional costs, and whether you qualify for the First Home Owner Grant and other assistance.
Life can throw all kinds of things at us, so try not to borrow your maximum limit, make sure you can still afford the repayments if one or two changes occur to your financial situation, and consider the impact higher interest rates could have on making your repayments.
Tip 3: Do the hard yards when inspecting
It is always wise to attend as many inspections as you can, as you will learn a lot just from visiting properties and talking with estate agents - but make sure you attend inspections with you eyes open. It’s also important to start thinking about whether you want to buy a house that’s ready to live in (perhaps even your ‘forever home’), or you’d prefer a do-upper.
If it’s the latter, you’ll also need to allocate funds towards renovations. If you have a friend who is a builder, developer or knows what to look for, bring them along to an inspection, and always pay for a building and pest inspection - it could save you a heap in the long run.
Tip 4: Location, location, location
As you look around, make sure you feel confident on where you want to live. There are so many factors to consider and everyone’s situation is different.
Some of the major considerations may be whether you will need to look into schools in years to come, whether you need/want to be close to shops, have a local park, have access to public transport, childcare options, and if entertainment options such as a local cinema and restaurants are important to you.
Tip 5: Get your loan approved then make an offer
These days, you can also get your loan approved in writing before you even start to look. Consider all features of a loan as well as interest rates and make sure you get anything you’re not sure about explained to you.
Tip 6: Get insurance and a good solicitor
Make sure you look at the type of insurances that you require for your property and your situation, which will include home and contents, and may also include checking over your personal insurances.
Once you’re ready to put in an offer, a conveyancer or solicitor can review the sale contract and your loan agreement and also finalise the settlement. This will mean you’re not left guessing if you’ve dotted all the i’s and crossed the t’s, and as with most financial matters, it’s important to pay an expert for this part.
To ensure you are equipped with everything you need to make an informed decision on a property, get in touch with the Rethink Financial Planning team for our personalised financial advice. We’re a team of trusted, highly-skilled financial planners in Newcastle and would love to help.
Contact us on 4962 4440 or you can fill out our Pre-appointment Questionnaire and one of the team will be in touch.
Disclaimer: The information provided in this article is not advice, but simply general information. It should be looked at as a starting point for conversations with your Financial Advisor as your personal situation needs to be taken into account. Each individual may have other assets or factors that affect the decisions you make and need to be considered.