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Top five tips before buying a home

1. Do a budget, work out how much you spend on items and how often you buy those items. When you do this budget remember to not only include the necessities such as electricity, petrol, insurance and food but also include the non essentials such as beauty therapy, magazine purchases, a night out at the movies etc…You need to decide what you would be willing to sacrifice and what things you simply can’t live without.
2. Once your budget is completed work out how much you could afford to spend on mortgage repayments. Look at what you currently pay in rent and work out how much more you could pay without too much financial hardship. This will give you a good indication of how much you can comfortably repay.
3. Arrange a pre-approved loan. Seek professional mortgage advice, a mortgage consultant will do all the analysis of the various loans available and assist you in receiving a pre-approval. A pre-approval is where the lender agrees in principle to lend the borrower an agreed amount. The conditions of the pre-approval usually include; a satisfactory valuation of the property by the lender's valuer, evidence of income from the borrowers and acceptance of the loan by the mortgage insurers and if mortgage insurance is required (the loan amount is over 80% of the value of the property).
4. Be aware of the additional costs involved with buying property. You may need to cover stamp duty (first home buyers are currently exempt from stamp duty), registration fees and legal fees. You may also need to pay for mortgage insurance. Generally these additional fees – will cost approximately 5% of the property’s value. There are also ongoing costs such as bank fees, maintenance of the property, building insurance and strata fees if you buy a property under strata title (multiple living areas such as units). All states have concessionary stamp duty rules for properties - speak to your mortgage consultant to find out what you may be eligible for.
5. Research, research, research. Look high and low for a property that suits your needs and your budget. There are often bargain homes to be found with a little persistence – be wary of deals where the offer is over a short time frame 'today only'.

Source | Australian Loan Company

All brokers with The Lending Shop are members with MFAA - The Lending Shop is proudly operated by the Australian Loan Company Ltd.

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