Are you in the market for a new property? Is the thought of buying a new property keeping you awake at night? Will you be able to qualify for a private mortgage to buy the property? Whether you’re purchasing your first home or you’re scaling up, there are plenty of questions you should ask before and during the property search and purchase process. In this regard, the most pertinent questions include:
- What is my budget?
- What sort of property suits my needs?
- What’s the history of the property?
- Is the seller willing to negotiate the price?
- Which home loan works best for you?
To negate having sleepless nights as you search for the ideal property investment, you should seek answers to these questions.
What Is My Budget?
It’s essential to establish a budget very early on. Budgeting for a mortgage is vital. The process of coming up with a budget can take a few months to more than a year. The main goal is to determine your cash flow (your total income and expenditure) and how much you can spare to pay for a mortgage. You can subtract rent from expenditure if you’re renting if you’ll move into the new property right away.
What Sort Of Property Suits My Needs?
To answer this question, consider the must-have elements of your ideal purchase and the nice-to-have elements. The must-haves are the elements you cannot do without when you move into your new property. It might be property size, nearby public amenities (for instance, schools and shopping centres), property layout and size, public transport, etc.
On the other hand, nice-to-have are things you’re more flexible with and can workaround. Such elements include outdoor space, fittings, designs, property amenities such as swimming pools, etc.
What’s The History Of The Property?
When considering a property to purchase, you should ensure you understand the property and purchase. An excellent way to unearth the quality of your purchase is to learn its history.
With this in mind, you should ask several questions: Why is the property owner selling? If a vendor is selling after purchasing a new property, they may be willing to negotiate a lower price.
How long has the property been on the market? If a property has been on the market for a fairly long time – over six weeks, it’s indicative the property is wrongly priced.
Are there known issues with the land, property, or neighbours properties? Find out if some known issues are affecting the value of the home. The building inspector and the sales agent might help you in this regard.
Is The Seller Willing To Negotiate The Price?
From the onset, ask the property agent whether the seller is open to negotiating. In the same light, ask the minimum a seller is willing to sell the property. The answers to these questions will determine whether you can afford the property or not.
Choose A Home Loan That Works For You
Once you’ve answered the above questions and identified a property to purchase, you should answer the question of financing. At this point, you should ask which home loan works best for you and suits your needs.
Mortgages come in different forms, each bearing unique add-ons and features. For instance, you might choose a loan with fixed interest rates for the security of knowing how much you’ll pay every month. On the other hand, a mortgage with variable rates might suit you better if you feel that interest rates will fall in the future.
There is also an option for the 100% offset or all-in-one loan. Such an account allows you to put your savings and income in one account, offsetting the mortgage principle, which, in turn, reduces interest due on your loan. This can save you a lot of money in the long run.
Another loan feature you might be interested in is the redraw feature. This allows borrowers to repay more than minimum mortgage repayment and withdraw the surplus repayment.
Finally, always compare loan rates. No matter how small a difference in rates is, it can translate to massive savings over the life of the mortgage.
Purchasing a property is a huge financial commitment. It’s only fitting you ask the right questions and seek the correct answers. That way, you reduce the chances of making mistakes that could cause financial ruin.
At New World Funding, we understand that banks aren’t always the best places to turn for a business or property loan. That is why you can turn to us. We’ll collaborate with you to ensure our loans are tailored to suit your specific needs. We are committed to providing a unique experience for each and every client.
Please call us today on 1300 974 985 or leave us a message and we will get back to you within 24 hours.