Buying a house is one of the most exciting and daunting experiences in life. You have to consider many factors that make the process a bit complicated. Whether it is your first time buying a house or looking to make a wise investment, you should never underestimate the home buying process. It should be done with a lot of research and careful planning.
That is why we have gathered some important steps to consider that will help you navigate buying a house. From location to the mortgage fees etc. this guide is everything you are going to need.
Top Property Considerations in Australia
Check the Property
The first thing you need to check before buying a house is its condition. Unfortunately, many homeowners tend to upgrade the aesthetics of the house to cover the shortcomings and faults inside the house. This results in misleading the customer as they develop a good impression from the outside. You should inspect the house as closely as you can and maybe hire a professional team to look into the situation.
If you are performing the inspection yourself, you should check the wires and plumbing to see if the wiring is done right and there are no water leaks, etc. The next is the condition of the roof. Fixing the roof can be quite expensive. Therefore, you need to spend some time here. Check its frame and look for any cracks etc. Once the roof inspection is done, you should check the entire house for any leaks or cracks in the wall. At the same time, check the electronics and fences if installed.
Evaluate Your Finances and Budget
Once you have checked out the property, it is now time to evaluate your finances and budget. You can perform this step before checking out the property as well depending on your ease and convenience. Evaluating your finances and budget means determining how much you can borrow from the bank. The mortgage tends to be a huge responsibility and should not be taken lightly. Therefore, before you give the final thumbs up for the house, you need to evaluate your standing.
The best way to do that is by getting in touch with your accountant and see how he can help you out. Make sure that you clear and debts and do not have bad credit. If that is the case, it might not be the right time for you to purchase a house. Banks will not lend you money if your credit score is bad or you already have multiple loans to pay. You need to pay them off first.
The Cost of Buying a House
Now that you have evaluated your finances and budget, you need to get in touch with a financial advisor who will share the entire details of the costs associated with the house.
The first thing is the deposit. In order to secure a home loan, you need to put in a deposit of 10-20%. If you wish to avoid the Lender’s Mortgage Insurance, you need to put in 20% approximately. You can opt for low deposit homes, but your mortgage insurance will be much higher and you will need to go through some additional steps.
The next cost is stamp duty. The amount of stamp duty you have to pay depends on the state you live in and the property’s purchase value. Then comes the legal and conveyancing fees. Since you will be involved in legal work as well, you should set aside $1000-$3000 for the purpose.
Finance and insurance costs. If the amount you are borrowing is 80% more than the purchase price, then you have to pay LMI to protect the lender if you fail to make payments. The process involves mortgage application and a valuation, which could altogether set you around $1000.
Is the Property Close to Important Facilities?
When buying a house you should research the area and see whether it is close to important facilities. Sometimes when people get a good price on homes, this is the first mistake they make due to buying on impulse. Since they are getting a good price, they do not think of other factors that affect the resale value as well as the ease of living.
Your property should be located in an area where convenience stores and schools are nearby. If a school nearby is not present, there should be atleast a bus stop that goes to the school and a playground for you to spend some time with your kids.
Investing Mortgages and Interest Rates
If you have the deposit ready, you are close to buying the house. However, still you need to go around and look for the right financing. Make sure that you fully understand the terms of the agreement. Find out the interest rate, term of the loan, and whether you can redraw funds. It might be that the interest rates differ on the basis of the state.
If you do not have the deposit saved, you can opt for the full financing of the purchase price, but in the absence of equity, there will be more risks involved. This is why you need to have a history of savings or have a parent act as guarantor.
Check with the Local Council
If possible, you should check with the local council about what is happening in the area along with the building approvals. The reason is that the last thing you would want is to find out that the property next to you is being developed into a high-rise apartment building. It can really create problems for you.
The apartment residents will most probably disturb your peace and privacy. Your future neighbors will be able to see your backyard and might also block the lovely views you always wanted. Therefore, visit the local council and plan things accordingly.
Know Your Neighbors
When you are about to purchase a property, be sure to take a final look at your neighbors and tenants. While most state housing tenants tend to be educated and disciplined, you are not going to have any problem moving in. However, sometimes some homeowners are not considerate of others’ peace.
To get a good idea of your neighbors, you should simply visit the street and observe the condition of the road. If you have garbage or anything unusual around, it might signal troublesome neighbors.
Purchasing a house in Australia requires being patient and smart. Always do as much research as possible on your part and keep your finances in order before purchasing. The tips mentioned above will make the overall process much easier by eliminating confusion and narrowing down your search. As a result, the chances of ending up with the right property increase manifolds.