For many of us buying a new home is one of the largest decisions we will make in our lives.
This process can be stressful and daunting, which is why we wrote 7 steps to buying a new home.
1. Research properties
The first step in buying a new home is to understand the type of property you are looking for.
By beginning your research with a clear picture of what you want, you can focus your time and attention on the right properties. Think about things like infrastructure, schools, transport, etc.
2. Determine your budget
Most home loan lenders will lend up to between 80% and 95% of the value of the loan in Australia. It’s worth booking an appointment with a mortgage broker or bank manager to determine exactly what you can borrow as soon as possible. You could also use an online borrowing calculator to give you a very basic idea.
You’ll also need to take into account the other costs associated with buying a new home including:
- Loan set up costs
- Conveyancing and legal fees
- Stamp duty
Stamp duty is the largest cost after your mortgage and will vary by state. You can use an online stamp duty calculator to give you a basic idea of how much stamp duty you will need to pay.
3. Choose the right home loan
Buying your own home is one of the biggest financial decisions you’ll ever make.
So take the time to consider your options, shop around for the best deal and find the right loan for you.
What can you expect from the Pumped On Property home loan guide and checklist?
- How home loans work?
- How interest rates work?
- What type of home loan is right for you?
- Which home loan features should you compare?
- Important points to discuss with your lender or broker
- Documents you’ll need to prepare for your lender or broker
- Costs you’ll need to take into account when purchasing your property
4. Property inspections and legal advice
Buying a property is one of the biggest purchases most of us will ever make in our lives, so make sure you do your research.
Take the time to do a building and pest inspection and get the right legal advice.
Building and pest inspection
These inspections assess the home for any potential issues that you may not pick up with your naked eye and can save you time, money and heart ache in the future.
While you are getting your finances sorted and searching for the perfect home, it’s a good idea to engage a solicitor or conveyancer. They will take care of the legal side of buying a home.
Fees will vary from state to state and it is wise to shop around. The cost will depend on the type of title the property is registered as, and also how much time and work is required. Call several solicitors or conveyancers to get quotes.
Conveyancing can include strata title searches, council building certificates, drainage diagrams and documents from the state traffic authority and water board. In addition, they will handle the exchange of contracts during settlement.
5. Make an offer
If you’ve found a home that meets all of your criteria you are ready to make an offer.
There are two types of offers – unconditional and conditional offers.
This is an outright offer to buy a property. You should be 100% sure that this is the property you want and that you have access to the money to buy the property. Once the vendor has accepted your offer, you are legally obliged to go through with the sale. Unconditional offers are the norm at auctions.
A conditional offer is also a binding contract, provided that all your conditions are satisfied.
Once your offer has been accepted you will exchange contracts and pay your deposit, which could range from anywhere between $2,000 and 10% of the purchase price. Your home loan lender will also arrange a valuation of the property to make sure the price you paid for the property is within their lending criteria.
6. Finalise your loan
Once your valuation has been completed and you have paid your deposit it’s time to finalise all of the loan documentation. It’s important to arrange insurances for the property at this stage. Insurance should begin from the official date of settlement.
The date of settlement is the date you legally take ownership of the property.
What happens during settlement?
- Your solicitor / conveyancer will prepare and arrange for you to sign a Transfer of Land document.
- Your solicitor / conveyancer will contact your home loan lender, the seller’s solicitor/ conveyancer, and other interest parties to arrange the date, place and time of settlement.
- Your solicitor / conveyancer should advise you one week prior to the settlement, of the exact date, time of settlement and the amount of funds that you are required to provide prior to settlement (if applicable).
- After settlement has taken place the seller’s solicitors will contact the real estate agent that sold you the property and advise them to hand over the keys to the property to you.
- Your solicitor should contact you and confirm settlement has taken place. They will also send you a Statement of Adjustment to show you how the funds have been disbursed to the parties involved.
The information provided in this article is of a general nature only and in no way constitutes legal or professional advice, or specific advice in relation to any finance, tax or the law. In all cases we recommend you receive professional advice based on your own personal circumstances.
Pumped on Property does not claim rights to any media posted unless specifically stated otherwise. Media are used solely for the purpose of discussion, comment or visual aid. We are not responsible for the source or editing of any media, unless stated.