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Tips for first homebuyers through to long-term investors

If you’ve watched the news or picked up a newspaper recently, you might have noticed that the outlook for the property market is grim, especially for those living in our capital cities.

According to CoreLogic, house prices could fall by nine per cent or more; eclipsing the losses seen in the 1991 recession.

While cheaper houses may sound like good news for those looking to join the property ladder, the downturn is expected to be accompanied by a ‘credit crunch’ that could impact the ability of some borrowers to secure finance.

While the headlines may seem bleak, borrowers with the right information and some patience will still be able to achieve their property goals in 2019, provided they follow these hints and tips.

Seek professional guidance

  • The first place to start is to understand your own personal financial situation to determine how much you can borrow and whether or not you are likely to be impacted by any lending restrictions.

    Our Lending Specialists are more than happy to provide some guidance.

    With this information, you can set a budget and start looking at properties in your price range.

Be prepared and know what questions to ask

Understand your home loan options

  • When the time comes to consider a loan, make sure you take the time to understand all the different loan options available.

    Honeymoon rates, interest only loans and low-deposit loans should all be considered carefully.

    Be aware of all the costs associated with a loan. This includes if you will need to pay Lenders Mortgage Insurance, settlement costs, any relevant grants that you may be able to access (First Homebuyer), if you will have the ability to make extra lump sum payments and also the payment frequency. It is very important to completely understand every facet of your loan as subtle differences can lead to financial implications in the future.

Plan for delays

  • In a tough property and financial market, it’s important to plan for bumps in the road and delays. It may take you longer to secure finance than expected, or the property you’d like to purchase may take longer to settle than desired.

    This means being patient, not rushing contracts that might not be right and making sure you have enough cash in reserve if you have to rent for longer than planned.

Understand your renovation options

  • A renovation can completely change the value of a house, but it is best to understand the costs of this prior to undertaking renovations, or purchasing a property that requires extensive renovations. While it may look like you’re getting a bargain, the financial costs could negate any savings you get at sale.

    You should also consider who is likely to want to rent or purchase the property that you are renovating. While you may have like a particular style, it is always a good decision to go with relatively neutral colours in order to maximise your returns. Seasoned investors will know the benefit of styling a property for sale as a small outlay of costs can bring a nice boost to a sale price.

  • Use a calculator to get an estimate of how much you can borrow. Try one here.

  • See if you qualify. To get a more accurate idea of how much you can borrow with State Custodians, click here.

  • Call our Lending Specialists and they can do the calculation for you over the phone plus answer any questions you have at the time. Talk to us on 13 72 62.