Tuesday, May 7th, 2019
If you’ve decided it’s time to upgrade to a bigger home, or a better location, or even if you simply want more outdoor space so the kids can run around (and get off those pesky devices!), buying your next home can seem daunting…but it doesn’t need to feel that way.
Other reasons to start worrying about the stress of hitting the home-buying can include the fact that you might be heading towards retirement, or about to face that inevitable empty-nest syndrome and keen to downsize, or perhaps you’re just daydreaming about that hoped-for tree or sea-change you believe will give you the lifestyle you’ve been longing for.
There are many reasons to start exploring the property market as a potential buyer.
Planning to buy a new home should be an exciting time and to help you focus on what matters most, read our 5 easy steps to help you buy your next home. Happy moving!
Buying your next home is a big decision.
To ensure you make the right choices for the best possible reasons it’s important to be realistic about the life you’re hoping to live in this new home you’re looking for.
Getting out a good old pen and paper – or an electronic spreadsheet, if that’s more your style – is a great start.
Take note of what your key priorities are – whether that means more space, less space, proximity to family, or the beach, or a faster way to work each day.
With these things figured out, you can immediately narrow the search and not waste time looking at properties that aren’t in line with your goals.
The truth is that, once you have done a thorough analysis of what you’re looking for, you might actually discover that where you are right now gives you the best option – and in that case, your forthcoming plans might be more about refinancing a renovation or refurbishment, rather than getting a different property all together. Think carefully and be honest with yourself.
Moving, or not moving, are both big decisions.
If the home you already own has increased in value, or your mortgage repayments have reduced your mortgage debt, you might be in a great position to access lots of equity.
With the right financial advice – and we do recommend you talk to a mortgage broker and your accountant or financial planner to work out your short-term and long-term financial goals and best strategies – you may be in a great position to buy a new home, without having to borrow too much more, if you have to borrow anything at all. When it comes to downsizing or moving to a regional location, out of the big city, you might even find you wind up much better off, with leftover funds to help you build a solid nest egg for a secure retirement.
With fresh insights into the type of home you know you want to hone in on, understanding exactly what you can afford is a critical piece of information to have. If a mortgage is still in your property ownership future, making sure you are borrowing an amount you can afford to repay is important and by crunching your numbers, seeking out professional financial advice and getting the best possible deal on a home loan, you can ensure you are starting from a good position.
A ballpark guide is to ensure your mortgage repayments do not exceed 30% of your take-home income.
Understanding whether it is better to buy first or sell first really depends on your own unique financial circumstances.
Generally speaking, selling your existing property first is a safer option, although buying first can seem less pressured and enable you to take your time to choose a home you truly love.
With pros and cons on either side of the debate, it is really up to you – but one thing is clear: do take your decision very seriously and ensure you have a safety net to fall back on to protect you if things might not go to plan.
Pre-approval from a lender is a sensible way to build your confidence, as it gives you an honest insight into what you really have access to.
By knowing exactly how much money you can borrow from your chosen lender, it allows you to show real estate agents and other buyers that you really do have skin in the game.
And, if you are bidding at auction, it helps you stay focused and not let your bidding go beyond your means.
If you’re in the camp that chooses buying firsts before you sell your current property. It’s a different approach.
Having the certainty you can pay the deposit for your new home, as well as organise bridging finance with a lender while you eventually sell your current home, is key. Take this seriously. There is a lot at stake and going in with realistic figures will help you avoid costly mistakes.
With all that sorted, all that’s left is to settle on the home you want and get an offer accepted.
With all the other ducks in a row, you’ll feel confident that you’ve made a wise decision – and you’ll have the funding behind you to speed your way to property settlement, without the stress.
For information about how to apply for a new home loan, seek bridging finance, or explore the benefits of refinancing to buy an investment property, our team of mortgage brokers at Loans Actually are here to help.