Get your financial house in order
Too many of us have over committed ourselves in recent years, letting dreams get dangerously out of touch with realities.
If you want to buy a property in 2013, make sure you’re ready financially, and you have a rational plan that doesn’t over extend your capacity. It’s no use living in a palace and scrounging to eat!
Pay down bad debt (credit cards and other high interest loans); get a hold of your credit history and assess it; draw up a budget and stick to it; identify where you can be saving even more for a deposit.
Make sure you have a solid savings plan, and enough saved for a back up plan if things go wrong. Check your insurance status. If something happened to you, could you still afford the mortgage repayments you’re looking to take on?
Get financial advice from a professional and understand exactly how much money you can borrow and repay comfortably before you start falling in love with properties. Remember that prices are often indicative and the market is competitive. Don’t set yourself up for disappointment by giving yourself no room to move when you’ve found the perfect property.
Fiscal irresponsibility isn’t just bad for you, it’s bad for the market overall, so make sure you’re in control of your money and it’s not in control of you. Peace of mind is priceless.
Get to know the neighbourhood
Resolve to learn about the place you’re thinking of moving. Don’t just look it up on Wikipedia, really get to know it.
Use Suburb Profiles to get a sense of the property market in that area. Look at median prices, demand and supply ratios, demographics, how long properties are on the market, and other useful data.
Research local publications, bloggers and other voices that give you an understanding of the area.
Go beyond the facts and sample the experience of being there. Take a trip and mix with the locals (not the tourists). See what they get up to, and chat to them about the best places to eat, drink, shop, work, play, learn and relax.
Field work isn’t so you can feel warm and fuzzy about potential neighbours (though you might). Sometimes you can only see a suburb’s best and worst aspects in person. What looks good on paper might reveal itself differently when you’re seeing it with your own eyes, so get the full picture before investing in that location’s future.
We look for reviews, ask questions and compare notes on almost everything we buy, especially if it’s expensive. Yet we still usually sink more time into comparing the best deal on a new television than a home loan product.
Mortgage brokers are great for helping you compare notes, but remember they work on commissions. That doesn’t mean they’ll give you bad advice, but it does mean you need to ask hard questions about disclosing any commercial agreements that might influence their recommendations.
Long before you find your perfect property, shop the market up and down to learn which deals and home loan products are best for your financial situation and property goals.
Comparison websites like ratecity.com.au, homeloanfinder.com.au and iselect.com.au are among the best tools to help you make an informed choice. They list more than 100 lenders and give a blow-by-blow comparison of loan product features. Use them to make a shortlist of deals right for you, and follow-up with lots of pointy questions for those lenders.
Assemble a superhero team
Home buying is serious, intimidating stuff. It’s a big commitment that involves a lot of paperwork, furrowing and heightened emotions.
You’ll hear how you should try to take the emotion out of the process as much as possible, so you don’t get yourself into a bad deal, or make a choice in the heat of the moment you’ll later regret.
It’s sound advice, but let’s face it – buying a home, especially your first ever, is a life adventure you want to live to its fullest.
There is real joy in searching for a forever home, choosing walls and a roof that don’t just do a job, but reflect who you are in the world at that moment.
Give yourself the time and space to enjoy the search, the discovery, and the moment it becomes yours. Let yourself be proud of what you’ve achieved!