30 Jan 2012
One of the fundamental parts of purchasing a property is figuring out the best way to pay for it. For most of us, that means getting a mortgage. Here are a few tips I can give you based on my experiences and those of people I’ve dealt with in selling them a home.
First of all, you should talk to a mortgage broker. Do you know anyone who has purchased property recently? Ask them if they’d recommend anyone. Word of mouth can often land you with someone who is more in tune with your needs, and more emotionally attached if they’ve been dealing with a friend of family member in the past.
Your mortgage broker should ask you a lot of questions with regards to what your circumstances are and your goals for borrowing the money to purchase a home. Are you purchasing something that needs work? Are you stretching your funds too thinly?
A good rule of thumb (and not always suitable so check with your mortgage broker – they will after all be able to take your situation into consideration when giving advice), your loan repayments should only be about 30% of your household income.
Other things to consider include:
*family changes (are you planning on having children?);
*probably financial changes (do you have any other loans for which you’re paying?);
*whether to fix your rate or go with variable rate;
*exit strategy (are you planning to upgrade your home sooner rather than later?);
*products included with your mortgage (credit or debit accounts etc).
*timing (how long do you have to finalise your finance for your property settlement?)
Quite often I come across buyers who don’t have pre-approved finance, so if you’re going to make the purchase of your dream home conditional upon finance, then you should at least have all of these things covered off with your mortgage broker so you have an idea of what you can borrow, and also cut down on the time needed for approval. The fewer conditions you have on your property purchase, the better your chances will be of securing your dream home.