The decision to buy a house is a life-changing moment. Make sure you are ready to take the first step with the help of this expert-approved yet straightforward guide on how to buy property. Read on to learn more on how to purchase property the right way.
Save Money for the Deposit
The first major step on how to buy property is to get your finances sorted and identify how much you can afford to save for your house deposit. The next step is to do your research to get a general idea of house prices and locations. This information helps you set a goal to work towards and set a realistic budget for your financial situation. In Australia, a good savings goal for a house deposit is 20% of the purchase price, plus enough to cover buying costs and other fees and taxes.
Find Out What You Can Afford to Borrow
The next step on how to buy property is to determine how much you can afford to borrow. How much you can borrow depends on your income and financial commitments, house deposit, other savings, and your credit score. Remember that if interest rates go up, your loan repayments could also go up. Be realistic about what payments you can afford.
Look for the Best Home Loan Rates
When you are considering how to buy property, you should shop for the best home loan rates. Contact at least two or three lenders so that you’ll get loan options that are tailored to your current financial condition. A rate that’s 0.5% lower could save you hundreds if not thousands in the long run.
With so many lenders to choose from, you can opt to get a mortgage broker to help find the best loan option. Consider getting approval from a lender because pre-approval shows that you’re eligible to apply for a loan of up to certain amounts.
Find a House to Buy and Negotiate the Price
The next step on how to buy property is finding a balance between the lifestyle you want and what you can afford. Reflect on why you want to buy a home. Consider if you plan to grow your family in that house or if you’re buying it with a partner.
Also, think about your must-haves and nice-to-haves. For example, the must-haves may include a specific layout, property size, public transport, and proximity to schools and hospitals. The nice-to-haves may consist of house design, outdoor space, fittings, and more.
When negotiating, stick to your price range. If you’ve been pre-approved for a $500,000 loan, don’t try to get houses that are advertised at $600,000. If you find your ideal location is outside your price range, you may need to consider other areas.
Look online and talk to licensed real estate agents. You can also go to site visits to explore what’s currently on the market. Once you’ve found a home you are happy with, negotiated the right price and evaluated the contract of sale. After the sale, make sure to follow up on stamp duty, which is a state government property tax. You will also need to stay on top of and home and contents insurance and more.