Buying your first property is both an exciting and daunting time, when you are a first home buyer, it seems everyone has an opinion and the information can at times be conflicting.
The first step in the process should be finding out if and how much your purchasing limit might be, given most first time purchasers will need to borrow a portion of the purchase price you will need to find out your capacity to borrow. This process will take into account how much income you receive, how much you have in savings, what debts you have and what your living expenses are.
To find out how much you can borrow you can use an online calculator such as the one on our website, whilst these are great resources they are a guideline only and should not be relied upon as an indication as to your likely approval of a loan.
To get an accurate appraisal you should talk to a mortgage broker, we would be happy to arrange a time to discuss this feel free to contact us. A mortgage broker will work with you and guide you through the process from start to settlement.
At an appointment our broker will assess the likelihood of the success of an application and if deemed highly likely, will make a recommendation in regards to the type of loan and institution you should apply with. Recommendations are based on your needs and wants that you advise via a Fact Find.
Once your broker has made an assessment and recommendation, an application to a lender will be prepared and submitted with supporting documentation for Conditional Approval. As it suggests the approval will be subject to certain conditions, usually the selection of a suitable property and that the property is acceptable to the lender.
Once you have the Conditional Approval you can get serious about buying would like to livea property, this is the exciting part. When looking for the right property, make a list of the desirable areas you would like to live and what type of property you would like to buy, along with the features you want the property to have. It is then a case of matching the property within the budget you have set.
If you find a property it will be for sale under 3 types of conditions
- Private Treaty
- Public Auction
- Expressions of Interest
Private treaty is where the vendor has set the price and advertised the same, and you are able to make an offer on the property. Your offer may contain a condition of finance and this is desirable when you are purchasing for the first time as it allows the lender to complete its valuation and issue a formal approval. If for some reason the formal approval is given you are able to rescind the contract and any deposits paid are refunded provided you have complied with your obligations.
In an Auction situation, if you are the successful bidder then it is assumed you are in a position to complete the contract regardless of if the finance is formally approved. It is not the preferred way to purchase a property for the first time however sometimes auction is the only option so make sure you mitigate as many risks as you can prior to bidding. We highly recommend you get some legal advice to ensure you are fully aware of your obligations prior to attempting purchasing at Auction.
Once a contract is signed possession doesn’t take place till the property settlement takes place, this is usually30/60/90 days from the date of signing the Contract of Sale. You will not be required to do much other than ensuring you have your contribution available, your legal representative will advise you of the figure and how the finds will be accessed.
A couple of things to be aware of; as a first time buyers seek professional assistance, get a property inspection report from a licenced inspector and make this a condition of the contract. If buying land to build on get a soil test from a qualified professional, this may save you a big headache and costs down the track when you come to build on the property. Use a qualified legal representative and as them lots of questions, it’s your first time they have probably seen hundreds of people just like you.
Use a reputable and suitably qualified Mortgage Broker, ask for their credentials and what their experience is.
Lastly as a First time buyer take the time to get it right, if it sound too good to be true it probably is, so if something makes you uncomfortable ask more questions and if the answer doesn’t satisfy you then walk away, this is the biggest purchase you will ever make so take the time to get it right.
