If you’re looking to buy a property in 2023, there are a few things you can do to make that happen. Here are five tips to help you get started:
Understand your borrowing capacity
As you begin your property search, it’s important to have a clear understanding of how much you can borrow. This will help you narrow down your options and find the right property for you. There are several factors that lenders take into consideration when determining how much to loan, including your income, living expenses, debts, assets, savings and the value of the property you’re interested in. Lenders want to make sure that you can secure the property with a deposit and that you’ll be able to make all of the necessary repayments. Keep this in mind as you begin your search for the perfect property.
Save your deposit
When you’re saving for a big purchase like a house deposit, it’s important to be disciplined and patient. Having a large deposit (20% or more of the total value) shows lenders that you’re capable of saving money over time. This is called genuine savings.
Your deposit will be taken into account when lenders calculate your loan-to-value ratio (LVR). The higher the LVR percentage, the riskier the loan is for the lender.
You can lower your LVR by saving more for your deposit or choosing a less expensive property.
If you can manage a 20% deposit, you’ll also avoid paying lenders mortgage insurance.
Find out about government incentives
If you’re a first-home buyer, you may qualify for government incentives that will make it easier for you to purchase a property. The federal government’s Home Guarantee Scheme supports eligible low and middle-income first-home buyers by providing a 5% deposit guarantee. State and territory governments also offer the First Home Owners Grant and other state-specific grants and schemes. We can help you determine your eligibility for these programs and assist you with the application process.
Arrange finance pre-approval
Pre-approval is a conditional commitment from a lender that indicates how much financing they are willing to provide you with. Keep in mind that pre-approval is not the same as final approval, as you will still need to go through an application process to secure the loan.
There are several benefits to getting pre-approved finance from us. Firstly, it will give you peace of mind and take away some of the uncertainty around what finance you will have access to when the time comes to make an offer.
It also shows sellers you are a serious buyer who is confident in the amount you can spend and able to move quickly to secure your dream home. Thanks for considering us for your pre-approved finance needs!
Find the right property
Once that you’re aware of how much you can afford and what sort of incentives you’re eligible for, you can focus your search around those parameters. Instead of attending numerous open homes, you can zero in on a handful of properties that fit your needs and budget.
With a pre-approval in hand, you can compare what your money will get you in various areas and weigh up your options. For example, would you rather purchase a larger residence in a more suburban area and have a longer commute, or live in a smaller property that’s closer to your workplace, family or children’s school?
Having your finances in order will enable you to move quickly when you find the right property.
The Broad Finance team are here to help
Whether you’re looking to buy your first home, your next home, an investment property or refinance to a home loan that better suits your needs, we can help. Get in touch today.
Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal, nor to imply any recommendation or opinion about a financial product. It does not consider your personal situation and may not be relevant to circumstances. Before taking action, consider your circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
