So you are looking to buy your first home? WOW, now the daunting thought of moving out of home and away from the comforts of Mum and Dad OR to stop renting with your mates.
I guess the upside is that you can finally hang that picture on the wall, have your own sanctuary to chill out in and no more agents hassling you about inspections.
Now where do I start? Who do I speak to? How does everyone else do it ? Surely I can’t afford to buy a property given the prices properties are going for in my area?
Solution: Find a great Finance broker who can be your trusted advisor and sit down, sooner rather than later, to map out a plan. As they say, “it’s hard to build a house without a plan”. You need a plan, so I suggest you spend as much time as you can to be educated in 3 key areas:
- The type of property you want to purchase
- The type of finance you need
- Where to buy
A great finance broker will invest time in you to educate you on the above key areas. They will give advice so you can feel confident you are making the right purchase and getting the most suitable loan to match your financial situation. It’s not just about the interest rate. Yes, this is very important, but there is more. They will teach you what an L.V.R is ( loan to value ratio), what mortgage insurance is and who pays it, why you need a solicitor or conveyancer and what some of their clients have done to purchase in the good areas.
A Broker will educate you on all lenders, not just your current bank. Yes, sometimes your bank is the most competitive but, given all lenders have different lending policies, it just makes sense to check out the market before making a decision.
Does it cost to use a broker?
No, as the broker gets paid via the lender for introducing the business to them and it doesn’t mean the interest rate is higher. It’s the same as if you were dealing directly with the bank.
Can’t I just do this online?
The Australian banking system is moving a lot faster than it once did and some non- major lenders have introduced an online process. This will be the way of the future, however the computer just isn’t capable of providing that financial relationship advice needed for your biggest financial decision – buying a property.
What about the First Home Owner Grant? Do I qualify? What stamp duties are payable? I heard there are different concession in each State ? Do I pay stamp duty now?
These are all questions that a Broker can answer and give clarity around how this process works.
My income is a bit different to everyone else! What if I am self- employed, a contractor, part-time on maternity leave?
Income is the most important criteria the bank looks at. All lenders have different lending policies and more than ever it’s the job of the broker to educate you as to the most suitable lender for your role and income structure.
In summary, an expert in finance has all the knowledge and tools to ensure you can get the answers you need to make an informed decision regarding the purchase of your first home. This person should be part of your advisory team when making future financial decisions. They will have your best interests at heart so you can experience and enjoy the exciting and rewarding decision to enter the property market.