If you are new to Australia then sooner or later, you may consider buying property, either as an investment or a home for your family. So there are a few things you need to do in preparation for your first property purchase.
1. Find steady employment
When you eventually want to apply for a loan, one of the first things the bank or lender will investigate is your employment history. They want to see that you are securely settled in a job with regular pay. From the financial point of view, of course, this is also the best way to start saving.
2. Start saving
It’s never too soon to start building up your savings towards your property. Set a firm, yet realistic budget and create a steady savings routine. This will not only build up your funds for a deposit and all the additional costs, it will also demonstrate to lenders that you are committed to the financial responsibility of buying a property.
3. Apply to Foreign Investment Review Board for approval
Your visa and citizenship status may affect whether you are eligible to purchase property in Australia. So if you are keen to own a home, contact the FIRB to learn whether you have permission to purchase real estate in Australia.
4. Research all your expenses
There are numerous one-off costs involved in buying a property, such as conveyancing fees, stamp duty and building inspection fees. Calculate all these fees into your budget, so you are not overloaded with unexpected expenses when you are finally ready to buy.
5. Reduce your debt
While you are paying off debts, it can be difficult to concentrate on saving for a deposit, and lenders may be less keen to approve your loan. Your best option is to reduce all your debts as much as possible, so you can concentrate on the important task of building your savings. When you are shopping for a loan, declare your debt, including any foreign debt, so you secure a loan you can pay off.
6. Secure pre-approval
Pre-approval is when a bank or other lender says they are willing to approve you for a loan at a later date. This is useful if you want to show sellers that you are serious about buying their property and that you can secure payment. It also gives you a clear idea of exactly how much you can spend on a property and how much you will need to borrow, based on the amount of your pre-approval. You can apply for pre-approval from a lender or through your mortgage/finance broker.
7. Get to know your mortgage/finance broker
A finance or mortgage broker acts as an intermediary between you and the lenders (Banks, Building Society) helping you fill in paperwork and search for and secure the best deal for your circumstances. Your mortgage broker should be able to answer all your questions, and help you evaluate your options.
8. Find your property
Finally, you reach the fun part – you have the funds and the support team to make your dream a reality. Now you can start searching for your home. Make a list of the most important attributes of your home – number of bedrooms, house or unit, proximity to public transport or schools - so you can recognize it when you see it.
Contact us today if you would like individual advice about your journey towards home ownership.
*Always seek independent financial advice before entering into any agreement to borrow money.