One of the first decisions you’ll need to make when looking for your new home is how much you have to budget for and the best way to do this is to get finance ready.
Wether this is your first home or if it’s been a while since you last purchased a property, we’ve put together some steps you can take to get started:
Choose a broker or finance institution and book an appointment
You may have a pre-existing relationship with a bank or want to shop around and find competitive rates, either way the first step is to make a decision about wether you’ll go direct to a bank or use a mortgage broker.
There can be benefits of going with a finance institution you already bank with – you’ve likely got a track record and have an understanding of their customer service, while a Mortgage Broker will be able to compare different banks and loans and do a lot of the running around for you.
Most Mortgage Brokers do not charge you a fee for their service as they are paid a commission direct from the bank instead.
If you’re looking for a broker to help you here are some tips on how to choose one:
Firstly, ask friends for recommendations and then choose a mortgage broker who is:
- Registered with ASIC – they should either hold a licence or be a credit representative and you can check ASIC’s register direct;
- Is a member of an Industry Association that monitors legislation and sets code of practice such as the Finance Brokers Association of Australia (FBAA) or Mortgage and Finance Association of Australia (MFAA)
- A member of an external dispute resolution scheme to safeguard you if you’re not happy with the service you received.
Ask your broker:
- How many lenders they have relationships with – the more the better
- How long they have been a broker, and
- How their commission is structured and wether it varies from bank to bank – you should have transparency over this.
Check your credit report
You can apply for a free credit report from a consumer credit reporting agency. This will give you an overview of your financial history including any defaults and transactions and importantly check for any mistakes that are recorded.
Having this will help you with discussions with your financier or broker as the bank will have this information also and will use this to assess your loan.
Discover your eligibility for any government grants or reduced taxes and fees
Ask the questions of your financier or mortgage broker or head to the government sites to see if you are eligible for any grants.
In addition to the First Home Owner Grant for first-time buyers, those who choose to build from scratch can enjoy lower fees on things like stamp duty. This is because you only pay stamp duty on the land and not the house itself. When you buy a newly built home that no one else has lived in, the First Home Owner Grant applies, such as in a new real estate development.
You can also take advantage of the First Home Buyer Assistance Scheme when buying vacant land. This means that if the land is valued less than $350,000 you won’t have to pay any stamp duty, you can save on extra costs and put that stamp-duty money into building your dream home. Click on the link above to check what grants are available in your state.
Some pre-approved loans can be obtained relatively quickly and without too much paperwork. Pre-approved loans will have specific conditions attached meaning it isn’t a guaranteed loan. It will however help you narrow down your price range and give you a good idea of how much you can spend on your new home. Your mortgage broker or lender will be able to guide you through the loans process.
That means no matter where you’re thinking about buying around Australia – such as in communities like Harmony on the Sunshine Coast, Brentwood Forest near Brisbane, The Rathbone in Sydney’s Surry Hills, Waterford in the Hunter Region, and Savana and Bloomdale in Victoria – you will be as financially prepared as possible to secure your dream home.
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