12 steps to home ownership
Buying a home can be daunting, especially when you are unaware of the steps involved. A brief description of the process is outlined below. If you’d like to know more about the steps to owning a home, the team at Verse Property would love to talk you through it.
Step 1 – Determine your budget
The first step towards home ownership involves a little introspection. You need to take a long, hard look at yourself and your finances and determine what you are planning in the years ahead and how much you can afford to repay. Determine your total monthly income and expenditure in order to conclude an affordable monthly repayment amount.
Step 2 – How much can you borrow
Now that you know the total amount you can devote to mortgage repayments, you should determine how much you can borrow. This amount will vary from lender to lender, and many now offer online calculators that allow you to determine your borrowing limit.
You can also ask mortgage brokers, who will have a good idea of how much the lenders on their panel will lend to you based on your income, debts, assets, number of dependants and whether you are buying the property alone or with somebody else.
Step 3 – Hunting for a home loan
Borrowers in the market for a competitive home loan need to educate themselves about the different available home loans. Additionally, borrowers need to familiarise themselves with the interest rates on these loans as well as the product features
Step 4 – Know the deals in the market
It’s important for borrowers to know what deals are in the marketplace in order to get the best deal. This is one time when advertising can be your friend. Ads on television and radio, newspapers and magazines are great places to find out what deals lenders are currently offering. Be proactive and contact lenders directly about deals on offer. Whether it’s a lower interest rate, zero establishment fees, frequent flyer points or other value-adds, the more you know about the current home-loan market, the better your negotiation skills when it comes to asking your lender for more product features or a lower interest rate.
Step 5 – Get approval
Having found the best possible deal, it’s time to apply for a home loan, attend a loan interview and get approval. Make sure you have all the necessary documents ready for your lender or broker.
Procedures vary from lender to lender, but it is likely you will be issued with either a ‘home loan guarantee certificate’ or a ‘pre-approval certificate’. This means that, subject to a few conditions, your home loan either has been, or will be, approved when you find the property you want to purchase.
Step 6 – Finding your home
Now that you know your budget, it’s time to determine how much ‘home’ it’s likely to buy you and in which suburbs you can afford to live in. The real estate section in newspapers, local papers and real estate agents are all useful sources of pricing information.
Once you have settled on an area, you should tell Verse Property real estate agents what you are looking for.
Step 7 – Don’t forget building inspections
Anyone buying a home should have it inspected for faults. There are number of different inspections to be made depending on the type of property, including building inspections and pest inspections.
These inspections are likely to cost anywhere between $200 and $600 each.
Step 8 – Making an offer
After your inspections, if you’re still satisfied with the property, it’s time to make your next move. While it is important to be cautious in approaching price negotiations, don’t be too inflexible. After all, you want this property. The last thing you want is someone beating your best bid by a few hundred dollars, knowing that the property is worth much more.
Step 9 – Legal legwork
Once you’ve found the property and you have the contract, it’s important that you check the contract carefully to ensure that everything about the property is understood and that there will be no legal surprises after you have purchased it. It may be beneficial to have a lawyer look over it. If you want to make any changes to the contract, now is the time to do it.
You also need to arrange conveyancing, which is the transfer of property title from one person to another. Most people employ a solicitor or conveyancing expert. The services of a conveyancing specialist cost up to $1,500. Many practitioners, however, offer conveyancing services for as little as $600. Conveyancing fees cover all the costs of the transfer of property, except for stamp duty, and most conveyancing firms will give you a free quote.
Step 10 – The waiting game
Take a deep breath and relax, you’ve earned it. The pace slows a little now as you wait for your legal team to do some tyre-kicking. For the next six weeks, sometimes less and sometimes more, your conveyancer or lawyer will make enquiries about the property. Survey and drainage diagrams will be examined, government departments will be written to, heritage orders will be inspected and council checks will be performed. In other words, the work is usually out of your hands.
Step 11 – Settlement at last
Settlement day is the day that you or your representative meets with the vendor to swap your cheque with their title of ownership. Cherish this moment, because with most people this certificate will quickly go to your lender, unless you are lucky enough to purchase the property outright. Government departments need to be notified of the change in ownership, and this is typically taken care of by your solicitor or conveyancer.
Enjoy the feeling
Congratulations, you are now the proud owner of your new home and you’re ‘in the property market.’ No more being looked down upon by property owners. Buying a home is a major achievement and it involves time and effort.