Six manageable steps to successful property ownership: Mortgage Choice

With only 15% of Australians feeling confident about the property purchase process last year, Mortgage Choice has released a list of six manageable steps to successful property ownership.

The first step is to start saving early.

Belinda Williamson of Mortgage Choice says most lenders require a deposit of at least 5% of the property’s value, but bigger is better as is may help you avoid costly lender’s mortgage insurance.

“The discipline of budgeting and saving regularly is also great preparation for managing the ongoing costs of property ownership,” says Williamson.

Secondly, it is important to know your home loan options to set realistic savings targets and timeframes.

Williamson says it is crucial to set aside time with a professional mortgage broker to explore the loan types available to you, including how much you can borrow and the deposit size needed.

Thirdly, you can get ahead by having your finance pre-approved.

Those who have their finance pre-approved may be more attractive to sellers.

“Loan pre-approval lets you head into the purchase process knowing the maximum amount you have to spend on the property,” says Williamson.

Williamson says this gives you confidence to buy at auction or negotiate on price to save you time looking at places that aren’t in your price range.

“Keep in mind pre-approved finance is typically a limited time offer and it does not lock you into a loan,” says Williamson.

It is important to look carefully at the sale contract and to make sure there is enough time for pest and building inspections.

Williamson says to look if the contract includes a cooling off period or is subject to a finance clause.

Williamson says in order to finalise your finance you need to have all of your up-to-date financial details on hand.

This includes verifying your current income, savings and assets as well as liabilities – including any outstanding debts or loans.

“In preparation for unconditional loan approval, your mortgage broker will provide a list of all the documentation you will need to have ready so that the application proceeds as quickly as possibly,” says Williamson.

Lastly, Williamson says to gather useful information about the property before settlement, such as electricity and gas suppliers.

Williamson says to know when the strata and/or council rates are due, if there are any priority repairs or maintenance or any other associated costs.

“There will always be eventualities that can’t be planned for but if property buyers start with the aspects of the property purchase process that are within their control then the sale will typically run smoothly,” says Williamson.