Before you start looking for a home or investment property, there are several key details to consider.
How Much Can I Borrow?
- Before purchasing a property it is always important to get an idea of how much you need to borrow.
- How much you can borrow will depend on several factors including:
- Your income
- What you are buying (home or investment)
- Eligibility for Home Owner Grant
- What deposit is required
- Other loans repayments and commitments
An important factor to consider is how comfortable you are financially to repay the proposed loan. It is imperative that you do not over stretch yourself. It is best if you sit down and work out a budget and understand how much you have left over to repay a loan comfortable. You should also factor in interest rate movements as this will affect your repayment amount.
Understanding the Costs
Some the other cost would include the following:
This is a government cost that is usually the biggest expense outside the purchase price of the property. Stamp duty varies between the states and territory.
Loan Set Up Costs
This includes establishment fees and will vary depending on the lender and the loan product chosen. It is important to note that you may also require Lender’s Mortgage Insurance (LMI) depending on your deposit size.
Conveyancing is the process of which a property’s ownership is transferred from the current owner (the vendor) to the buyer. A conveyancer is a legal representative that specialises in this field. Either a conveyance or solicitor will review your Contract of Sale and ensure appropriate checks are conducted on the property with local government agencies.
It is always recommended that prior to purchasing a property, you hire professionals to inspect the property for structural defects, concerns, pest infestations, anything that could potentially cause damage to your property.
Getting a deposit together
There are many options available in relation to how much you will need to come up with as a deposit. Depending on your situation it could vary from 3% - 20% sitting down with your trusted mortgage professional will ensure you know which options are available to you.