Before you even start looking through the property guides, here are my tips:
1. Save, Beg, Borrow (but don’t Steal) as big a deposit as you can.
Although a 10% deposit is generally required to purchase a property, you will need a 20% deposit if you want to avoid paying the bank an insidious thing called mortgage insurance.
And no, it’s not what is sounds like.
Mortgage insurance is an insurance that protects the bank in the situation where you are unable to pay the mortgage.
Should this happen and the bank is ultimately forced to sell the property, if they are unable to sell it for enough to repay the loan, the mortgage insurance covers the difference, so the bank is not out of pocket.
2. Find out what you can borrow.
This is what is called “pre- approval” by the banks and if you do this earlier on, it will save a lot of precious time for you down the track in the purchase process.
Many people use the services a mortgage broker for the pre approval step and you if you don’t already have a relationship with bank, I recommend you contact a reputable one and discuss your borrowing ability.
Because they deal with many of the major banks and credit unions on regular basis, they know the different lending criteria and they can save you a lot of time & effort by in finding the right one for you.
You don’t pay for their services as they are paid by whichever bank/ credit union they find for you and
3. Going once, Going twice and Sold!
As auctions, online or in person, are very popular in a strong real estate market, take part in a couple before you are ready to buy. This way you’ll know what to expect when you are bidding for the property you want.
4. Better get yourself a Lawyer son, better get a real good one.
Find a lawyer you understand and get along with.
You’ll need his or her guidance, advice and assistance with the purchase and from time to time for other things so having one you know and understand is important.
It’s a bit like a family doctor. You hope you won’t need them but it’s reassuring to know one just in case.
5. My Castle?
Remember your first house won’t be your last.
Don’t expect your dream home first time round.
That will come later on.
The first one is just to get into the property market.
The statistics say that you’ll be upgrading in around 5 – 7 years.
For your first property, buy one that you can value add to.
Ripping up the old carpets and polishing the floor boards, replacing the formica kitchen benches and cupboard and a new paint job will increase the value of the property considerably.
That’s it.
MOST IMPORTANT OF ALL, enjoy the experience.
Remember, you’ll only ever buy your first house once in your life and it is a big deal.