5 things to know before buying a property
The process of buying a property can be painful and tedious. Even after tons of research, there are things that you may just miss or not anticipate. Here are some things you should know before buying a property.
Don’t get pressured.
Don’t let anyone or any circumstance pressure you into making what could be a huge mistake. The house may be perfect but if it doesn’t fit into your budget, you’ll have a hard time making those finance repayments and it may take a long time to sell if you wanted to. There will always be new houses on the market that you may like even more than the previous ones.
Get a finance broker.
Working out what is on offer from each institution can be extremely time-consuming and confusing. Different finance providers will have different rates and there are many areas that can be negotiated with the lender. Because they have access to numerous products and lenders, a broker will source the best rates for you, manage the application process and provide tailored advice along the way. Even if the difference in rates is marginal, 0.5 – 1% can save you a lot of money over the life of your loan.
Know your affordability.
Knowing your finances gives you a sense of control on spending and helps in your loan application as well as repayment capability. Look into your income, spending habits, bills, and home repayment amounts. You need to know what you’re comfortable paying which may be a lot lower than what the banks are happy to loan you.
If you’re serious about house-hunting, the first thing you need is a pre-approval which essentially is a guarantee that you will be approved if you apply for a loan. Pre-approval is especially helpful when you’re attending auctions where the sale is final once the hammer falls. But ultimately, a pre-approval means you can go from open houses and inspections knowing exactly how much you can afford to spend and even make a serious offer on the spot.
Choose a repayment scheme suited to your situation.
It depends on the amount you borrow, which should be below the maximum loan-to-value ratio (LVR) or 80% of the total purchase price. A higher ijara rate might offer some flexibility or redraw and offset facilities; and a lower rate, some hidden costs. The schemes vary. It can be a fixed rate or variable rate. Choose which is best suited to your circumstances.
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