Toggle Menu Header

Justprop Team

Justprop Team

10 basic steps to buying a house

7Mo ago 0 Replies 204 Views
One of the biggest financial investments you’ll ever make is buying a house. Take the time to do your research and follow these 10 steps to simplify the process.

1. Know your credit rating
Before applying for a loan, get a copy of your credit record. When considering your home loan application, financial lenders check your credit score for any bad credit or significant debts.
The three main credit reporting bodies in Australia are illion, Equifax and Experian and individuals can get a free copy of their credit report annually. Credit bodies may hold different information, so obtain a report from all three for a comprehensive credit overview.
If your financial position isn’t satisfactory, consider reducing or clearing outstanding debts. With store credits and credit cards, banks look at outstanding card balances as well as the available amount so try to clear and close accounts.
2. Determine your budget and affordability
Speak to your accountant, financial advisor or lending institution for a clear indication of what you can afford as there are many costs to buying a house as outlined below:
A home deposit of approximately 10 – 20 per cent is generally required.
Legal and conveyancing fees cover transfer of property title between owners. This includes the exchange and settlement of contracts. Costs can average between $500 to $3,000.
Stamp duty (also known as transfer duty or general duty) is a tax borrowers must pay to state and territory governments. The amount is applied on the property purchase and varies according to the state lived in.
A complete building and pest inspection can protect your investment and ensure you’re buying a property that’s structurally sound and free from pests including termites which could literally bring the walls crumbling down.
Ensure you can afford mortgage repayments in the event of interest rates rises.
Additional costs can include council rates, strata fees, moving costs, utilities and insurances. Before purchasing a property, check out BMT’s cash flow analysis calculator PropCalc which looks at key suburb data, maintenance costs, rates, insurance and much more.
Finance and insurance costs increase if you have less than 20 per cent deposit and you may need to pay Lender’s Mortgage Insurance. This is usually a one-off, non-refundable premium paid by borrowers, either upfront or added to the home loan. Shop around for the best loan rate, look at fixed or variable preferences and always read the fine print.
3. Select an agent
Speak to local real estate agents about how the property market is performing in the area. Research similar properties, sale prices and if you are time poor, consider appointing a buyer’s agent to help find suitable properties, perform due diligence and negotiate sale prices.
4. Gain pre-approval
Get pre-approval of your loan to determine your available budget. This involves completing an application and providing lenders with your financial information so they can decide on your borrowing status and ability to service the loan.
5. Attend open homes
Now the fun begins as you decide where to live and what to buy. Consider proximity to shops, work, schools, public transport. Look at council development applications to understand the suburbs changing landscape. Look at lifestyle when determining the location and whether you’d prefer a freestanding house in a residential area, a strata titled property, a house with acreage or one of the many other options available. Also decide what’s not negotiable.
6. Determine common issues
It’s easy to get caught up in the romance of buying a house but take time to look around. Investigate wall cracks, electrical or water issues (leaking taps, water pressure, plumbing, hot water systems). Structural issues are costly, so check for uneven floors, roofing, doors and windows. Look at flooring under carpets and check for mould which can be extremely damaging. See if new paint is hiding issues beneath. Also check roofs, gutters and drains and obtain a building and pest inspection to help identify issues you may not see.
7. Make an offer
Consult a licenced conveyancer and get a property valuation prior to buying a house to determine your offer. Conveyancers can request inspections and are qualified to manage legal processes during settlement and title transfer, ensuring you’re meeting all obligations and are protected.
8. Investigate insurance and utilities
Think about insurances, including home and contents, mortgage protection and building insurance if planning renovations.
If you don’t have insurance or aren’t sure if it’s adequate, contact BMT Insurance. BMT can provide a quote for house, contents and landlord insurance (if using your existing house as an investment property).
9. Keep as an investment?
If keeping your house as an investment property, organise a tax depreciation schedule to maximise the return on your investment. During the 2018/2019 financial year, BMT found residential property investors an average of almost $9,000 in first year deductions.
BMT can review your current circumstances and provide a tax depreciation schedule including a forecast of eligible claims for depreciable assets and structures.
10. Settling the property
Once an offer is made and accepted, the deposit paid and exchange of contracts occurs, it’s generally six weeks between the exchange of contracts and settlement of the property. In this time, you’ll finalise transfer of the remaining balance to the seller, arrange insurances, pay stamp duty, receive keys and title deeds to your new house. Congratulations!

Source:

Share on:

Top Contributors Last 30 days

1 InvestAus
2 Anuj
3 Joshua

Related Posts

Australia's auction markets are starting to return to normal

Capital cities hosted 1,134 auctions over the weekend, turning in a preliminary success rate of 72.4%. Melbourne activity started to recover as restrictions lifted. Over the weekend the city hosted 188 auctions, 65% of which turned into a sale. It is crucial to note, however, that of all auctions, 10% were withdrawn prior to the auction date. Sydney, on the other hand, continues to carry the whole auction market, accounting for 60% of overall activity. While volumes were down on a weekly basis, the city's clearance rate remained solid at 75.9%. Across smaller markets, Canberra dominated sales activity, with 85.7% of 59 auctions turning into a sale. Adelaide, however, reported the highest volume, hosting 78 auctions over the weekend. Source: x Auction markets ramping up Melbourne is starting to show signs of life as activity gradually strengthens www.yourinvestmentpropertymag.com.au
InvestAus
InvestAus
2D ago 5 Views

Cost of rent in Edmondson Park

Hi please tell the price for rent of a house in Edmondson Park..
Harsha
Harsha
3D ago 16 Views

Australian residential property by foreign investors has seen a fall of 11% in investment

Investment in Australian residential property by foreign investors fell by 11% between the 2018 and 2019 financial years, according to figures from the Foreign Investment Review Board. A drying up of project launches in the wake of the pandemic is likely to drive down building numbers further, with border closures stripping away demand… The report confirmed a trend towards brand new over established property alongside an increasing interest in higher end purchases, with the median price of purchases over $1m up 1.6 per cent to account for one in five sales in the 2019 financial year… Get details at: x Foreign investors abandon Aussie property market -... Investment in Australian residential property by foreign investors fell by 11% between the 2018 and 2019 financial years, according to figures from the Foreign Investment Review Board. The 11% fall oc... www.macrobusiness.com.au
Joshua
Joshua
3D ago 156 Views

Nearly half of all loans deferred due to COVID-19 hardship have resumed repayments

The total loans deferred by Australian homeowners and businesses peaked in late June, with around 500,000 mortgages and more than 200,000 small business loans having paused repayments. As of last week, the number of deferred mortgages dropped to 270,000, with repayments having been resumed on at least 224,000 loans, based on data provided by seven of Australia’s largest banks. REIA President Adrian Kelly said the data is not only a promising sign for the economy as a whole, but bodes particularly well for the property market. “The resumption of repayments in about half the cases is an encouraging sign that mortgagees will not be facing a cliff that some anticipated a few months ago,” Kelly said.   Source: x Nearly half of deferred loans have resumed repayme... Number of deferred mortgages has dropped to 270,000, down from peak of around 494,000 www.yourinvestmentpropertymag.com.au
Anuj
Anuj
3D ago 13 Views

HomeBuilder scheme has pushed up new home sales

The report showed that new home sales were 11.8% higher in the seven months after COVID-19 restrictions came to effect compared to the same time last year. “HomeBuilder has been successful in providing consumer confidence for those customers that had delayed a major investment decision earlier in the year,” he said. “The program has also brought buyers into the market that would otherwise not been able to purchase their first home for a number of years.” Over the seven months to September, new home sales in Western Australia have soared 95.7% compared to the same period last year, the highest among all states. Sales in Queensland and New South Wales also rose 7.1% and 3.3%, respectively, while South Australia posted a marginal increase of 0.5%. Victoria is the only state where sales have gone down at 10.8%. “Delays in the processing of new home loan applications is the most significant constraint to getting these new building projects under construction,” he said. “Processing times for new home loans remain at around two months. Access to finance for new home construction has become exceptionally tight following new regulations introduced in recent years.” Get details at: x HomeBuilder drives new home sales - HIA New home sales are up because of the grant – but challenges remain www.yourinvestmentpropertymag.com.au
InvestAus
InvestAus
3D ago 9 Views

Australia’s residential rental property market is showing signs of recovery from the economic impact of the COVID-19 pandemic

According to the report, 40% of renters are now finding it easier to manage their lease payments, up from 26% when the firm conducted its first survey last March. However, only 11% of the respondents feel optimistic about life post-pandemic, compared to 15% in March. “But as restrictions have slowly relaxed across most of Australia (except in places like Victoria), more renters are starting to re-enter the market and more have returned to employment, which is making rental payments easier for much of the market,” he says. “Right now, it’s a real mixed bag across the states, which isn’t surprising given the disparate levels of restrictions and recovery,” he says. “In New South Wales, Queensland, and Western Australia, we’re seeing increased activity as the economies start to open. Renter activity is almost back to pre-COVID-19 levels.” “The whole ‘work from home’ phenomenon has been really interesting, and many are predicting that this will have an impact on CBD properties,” he says. “People are looking for more space or room in their homes and there’s less of a reliance on proximity to work. This should mean that good properties in the 2 to 10km rings do well, as they generally do.” Bader adds that markets that rely heavily on international and intrastate tenants will likely struggle until travel restrictions lift. Continue reading at: x Has the rental property market recovered? Australia's rental market is showing signs of growth – so why are renters concerned? www.yourinvestmentpropertymag.com.au
Justprop Team
Justprop Team
4D ago 12 Views
4 online
Sourabh
Shree Leela
Tamer Soliman
Liam