Continued from Part 1
Once you’ve settled on a suburb and the type of property you’re after, it’s time to finalise all of the “serious” stuff. Interest rates, redraw facilities, LVR, LMI, property inspections and exchanging contracts are all terms you’ll become incredibly familiar with.
3. Loan choice and pre-approval
There are literally thousands of products on the market and it would take months to find the one which is best suited to you. An Aussie broker can search through hundreds of loans for you by using Aussie’s Mortgage Explorer software. Or you can go to Aussie’s website and try the 1-Minute Mortgage Calculator for some helpful information.
Mr Norman said once you’ve spoken to a broker, they will lodge the application on your behalf and let you know whether you have been pre-approved for a home loan.
4. Legal advice and property inspections
Once you’ve found your dream house, you’ll need to engage the services of a solicitor and a building inspector.
For legal advice, a solicitor (or conveyancer) can take care of the legal requirements (including strata title searches, drainage diagrams, council building plans and certificates also documents from utility companies). They will also handle the exchange of contracts through the settlement process.
It is worthwhile spending the money on a property inspection. You don’t want to pay hundreds of thousands of dollars for a home which may be about to collapse from white ant damage.
5. Making an offer
There are two types of offers – conditional and unconditional. The former is more common, but can be discussed between vendor and buyer and is not necessarily legally binding.
When you are ready to secure the property of your choice, you should progress to an unconditional offer. Unconditional offers are an outright offer to buy a property, and once the vendor has accepted you are legally obliged to follow through with the sale.
There are two copies of the contract of sale that need to be signed, one for you and one for the seller. You both sign both copies before the contract is ‘exchanged’. This is usually when the deposit is paid.
Mr. Norman said your lender will then organize for a valuation of the property, so they can ascertain if the price is fair market value and also whether LMI needs to be charged.
Searching for a property to buy can be exciting and daunting at the same time. You may get lucky and find a place that ticks all the boxes, but your dream property could pass you buy unless you have done what you can to be ready to buy.