How it works

Saving for Your Home: The first step in buying a house is setting a clear savings goal and creating a realistic plan to achieve it. Determine how much you need for a deposit, which is typically 10-20% of the property value. For example, if you're aiming to buy a $600,000 house, you'll need to save at least $60,000 for a 10% deposit. Pay off any existing debts, such as credit cards or personal loans, to improve your financial standing and increase your savings potential. Track your spending habits and cut out unnecessary expenses to reach your savings goal faster.

Understanding Your Deposit: Before purchasing a property, it's essential to understand the role of the deposit. While you can buy a house with as little as a 5% deposit, it's advisable to aim for at least 20% to avoid paying Lenders Mortgage Insurance (LMI). LMI is an additional cost that protects the lender if you default on the loan. By saving a larger deposit, you not only reduce this extra expense but also improve your chances of securing a better loan deal.

LMI Explained: Lenders Mortgage Insurance (LMI) is a fee charged by lenders when your deposit is less than 20% of the property's purchase price. This insurance protects the lender in case you default on your loan. Deciding whether to pay LMI now or save for a larger deposit depends on your situation and the property market. Some borrowers prefer to pay LMI and enter the market sooner, while others choose to wait and save more to avoid this cost. Consider your financial stability and market conditions before making a decision.

Getting Pre-Approval: Home loan pre-approval is a crucial step that indicates a lender's willingness to approve your loan based on your financial situation. It gives you a clear idea of how much you can borrow and strengthens your position when making offers. Pre-approval is typically valid for 3 months, and you can extend it if needed. Having pre-approval allows you to bid confidently at auctions and shows sellers that you are a serious buyer ready to settle quickly.

Searching for Your Property: Finding the right property involves balancing your lifestyle needs with your budget. Consider factors such as the number of bedrooms and bathrooms, lot size, property condition, and curb appeal. Look for properties in desirable locations with good schools, proximity to work, and access to public transport and amenities. Research the market to understand property values and set realistic expectations for what you can afford.

Securing Your Property: Once you find a property you like, make an offer and negotiate the purchase terms. Work with a real estate agent to understand the market value and ensure your offer is competitive. Be prepared for negotiations and stay within your budget. If your offer is accepted, you will need to pay a deposit and sign a contract of sale. This step also involves arranging a building and pest inspection to ensure the property is in good condition.

Formal Approval: After securing the property, submit all necessary documents to your lender for formal loan approval. This includes proof of income, savings, and identification if you didn’t have pre-approval already. The lender will assess your application and confirm the loan amount. Formal approval is a critical step that finalizes your loan and prepares you for settlement. Ensure all paperwork is accurate and complete to avoid delays.

Settlement: Settlement is the process of transferring ownership of the property to you. It involves completing legal and financial transactions, such as paying the remaining purchase price, stamp duty, and legal fees. Your conveyancer or solicitor will handle the paperwork and liaise with the seller's representative. Once settlement is complete, you will receive the keys to your new home and can start moving in!

Moving In: Congratulations! After settlement, it's time to move into your new home. Plan your move carefully, including arranging for utilities, internet, and other essential services. Update your address with relevant authorities and organizations. Take the time to familiarize yourself with your new neighbourhood and settle into your new home. Enjoy the exciting journey of homeownership and make your new house a place you can truly call your own.

For any further information please feel free to make an appointment.

Cheers,

Luke

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