First home property buyers beware

It is very important to know as much as possible about lending criteria and market update when buying a property irrelevant whether you are a first home buyer or buying an investment property. However as a first home buyer, you are not familiar with the process and terms & conditions for buying the house. One would usually go with what family or a friend has shared their experience. One need to know the most important thing to do is talk to trusted mortgage adviser who will help you throughout the home loan journey. One will also need to understand following things 

·         The property that you are intending to buy is for you to live in and not for     investment or for sale in near future.

·         How much is the deposit, 20% or under. If the deposit is under 20% then understand the lending criteria accordingly.

·         What are fees involved in the entire transaction

·         What is return on investment for the property that you would potentially buy.

Usually one should follow the 8 steps when buying a first home

1.       Talk to your trusted mortgage adviser and discuss your goals and plans of buying your first home

2.       Complete Application forms, statement of position and provide supporting documents to your mortgage adviser to seek pre-approval to buy a property.

3.       Once you have received pre-approval or got indication on the purchase price, you need to contact real estate agent and ensure you have strong relationship with an agent. Be honest with them and clear with them so that they can help you find your dream home.

4.       Once you like any property in your price range, put a conditional offer subject to finance, building inspection and LIM report.

5.       On acceptance of your offer, provide all the documents to your mortgage adviser to ensure you get unconditional offer letter from the Bank by making sure Bank is happy with the entire transaction and happy to accept the property as security.

6.       Get your solicitor to do the due diligence before going unconditional. Once you decide to go unconditional, you will usually have to put 10% deposit in Real Estate agent’s trust account.

7.       Make sure you get house insurance and personal risk insurance at least 2 days before the settlement date. Also ensure that you do pre-settlement inspection on the property. Once all good as per expectation ensure that the difference of deposit money has been transferred to Solicitor’ trust account.

8.       On the day of settlement, your solicitor will complete the transaction and you will get the keys for your dream home.


Fees and charges during the transaction

·         Solicitor’s fees indicative range between $900 - $1500

·         Building inspection fees indicative $500 - $750

·         Registered Valuation cost $600 -$1000 only if bank requires the valuation

·         House Insurance and Rates combined about $4500 per annum (it will defer from property to property and case by case basis)

Please note if you are borrowing more than 80% funds as a home loan, fees and charges will defer from Bank to Bank depending on the loan amount.

To discuss your options call today on 0800 TEAM GOPAL