First home ownership is often the most significant financial commitment of a lifetime and it’s one that has been becoming progressively more expensive. The metaphor of first home ownership as being the bottom rung on the property ladder has never been more apt. Wages have not increased at the same rate as house prices, treatment so where a house in an Australian capital city cost three years of gross annual income in the early 1980s, you’ll now need well over six years of earnings for an equivalent home today. In other words, mortgage repayments now swallow up a larger proportion of household income than ever before. Once you’re on the ladder, taking subsequent steps upwards gets easier, but getting an initial foothold on that first step requires careful planning and some clear parameters. The loan specialists at Diversifi are on hand to guide you through what can be a complex process and also, to access the best mortgage product to suit you and your financial circumstances. Ahead of discussing your specific requirements, here are some introductory steps you can take to prepare.
1)What can you afford?
If you’re not yet living with a budget as part of your routine, then you must start now. Getting a clear and accurate snapshot of how much you earn and how much you spend is probably the most important in a list of criteria that lending institutions need to assess how large a loan facility they are willing to make available to you. More importantly, you need to know how much of your how to buy clonazepam online income you are willing to devote to a mortgage. Plugging your income and expenses into an online calculator like the Borrowing Power Calculator on our website will give you an idea of what you can afford to repay within your current circumstances:
It is recommended that you be conservative in your calculations. Always allow for a 1% rise in interest rates.
How much of your income have you managed to save? In an ideal scenario, your goal should be to have 20% of the purchase price available as a down payment. If the purchase requires your lender to finance 80% or more of the purchase price, then a Lenders Mortgage Insurance premium will be added to the mortgage, which insures the loan and protects the bank in the event that you default and the property needs to be sold to recover the debt. Saving for a 20% deposit not only cancels out an avoidable cost, it also means borrowing less and being charged less in interest over the term of the loan.
3)What do you need?
You now have an idea of what kind of mortgage you can afford and you have a target for achieving a healthy deposit. It’s time to figure out what sort of home you are aiming for within your financial parameters. Buying a home for your current circumstances may not necessarily suit where you will be in five or ten years time. Are you in a position to purchase a home that can accommodate changing circumstances or will you live in your first purchase for the short term? While you may be embarking on joint ownership with a partner and your income may rise as you progress in your careers, will parenthood potentially reduce a double income to a single income? Once these factors are taken into account, you can start identifying the areas with the homes that meet your requirements within your price range and your future plans. Do you need to be close to public transport networks for your work? If children are a possibility in your first home, is school selection and proximity a factor in your choice? Do you want to build a new home? Popular websites to start narrowing down your search include:
4)Engage a broker.
Once you’ve saved up your deposit target, it’s time to match the right mortgage product with your current financial circumstances and your future plans. If you have the time to research the vast array of mortgage products available in an ever-changing marketplace and the opportunity to speak directly with lenders, go for it! However, it makes a lot of sense to engage a mortgage and finance expert – an accredited professional whose mission it is to be aware not only of which mortgage products have features that will best suit you and whether you meet the criteria in order for lenders to consider your application favourably, but brokers are also completely across the process of property purchase and can guide and educate you along the way. Essentially, a mortgage broker can act as your representative and go-between with your lender, the vendor of the property that you’d like to buy, and your conveyancer or solicitor. For a detailed summary of mortgage broker accreditation and how brokers derive an income from the process, go to:
Once you’ve established which lender and mortgage product is best suited to your circumstances and plans, make sure you are able to provide all the necessary information and documentation for pre-approval and apply! Having a loan amount available that is pre-approved allows you to search for a property with confidence. In a competitive buying environment, it could also be the difference between an agent recommending the vendor accept your offer over another offer that is still subject to finance.
Armed with your pre-approval amount, it’s time to search for your first home through sale or auction, or your new house and land package. This is another instance where a broker can prove invaluable, assisting with a negotiation strategy, making you aware of additional costs such as how much potential stamp duty is attached to a purchase price and even whether or not you’re eligible for government assistance through a grant scheme. Other important steps to take once you’ve zeroed in on the property you really want is to commission a full condition report with a reputable building inspection service and also to research the immediate area surrounding the property. There may be issues that aren’t immediately apparent that neighbours could make you aware of such as aircraft flight paths or a busy times of day on main roads nearby. If everything is to your satisfaction, it’s time to put your best foot forward – make that offer and give yourself the best chance possible to take that first step on the property ladder. Good luck!