Three things you should be looking for in your mortgage broker
It’s a big step to invest in a property for any reason and is easily the most important financial decision most people will make in their lives. It is definitely something that needs careful thought and is something that people should generally seek professional help with. So here’s a quick list of pointers to help keep you on the right track when going through this difficult and slightly confusing process.
1. Always negotiate on your contract.
Inevitably, buying a property requires a large amount of paperwork and one of the things you will have to sign is the “home buying contract” or “Contract of Sale” which lays out the specific agreements that you have made between the seller, buyer and agent. It is often portrayed as something that has absolutely no negotiation and this is far from the truth as in any business arrangement, before you sign, you can negotiate. Should you want more time to review the contract, get a second opinion or waive any tests or repairs that are required to speed up the process then you are more than within your rights to request that.
2. Factor in all costs not just purchase price
When you find the perfect house, it can be tempting to just focus on the actual purchase price and while it will be by far the most significant cost. But don’t forget that you will also need to pay for insurance, legals, pest & building inspection reports and also may need to cover mortgage insurance and stamp duty depending on the purchase price and available concessions.
Be sure to factor all of this when deciding if you can afford your dream property.
3. Don’t just buy for the present – plan for the future
What we mean by this is that while the house you like may be perfectly suitable for the lifestyle you currently have, life is subject to change and your long term plans and goals have to be factored in to make a truly sound investment. Think about things like if you plan to get married or having children or even pets, what your career aspirations and schedule might look like in 5 years’ time, does your job have the potential for you to relocate for a more senior position? Think about all of these things before making a solid decision4
4. Always buy what you KNOW you can afford, not what you think.
Now it’s always very nice to know that your mortgage has been approved for far more than you expected, however financing is not as simple as merely paying for the house with the mortgage. When you are repaying you will repay at a rate relative to the amount that you borrowed and as such if your income may change in the future you could potentially be left with a deficit in your repayments that will leave you struggling to keep up. So bear this in mind when initially making a decision on budget.
We hope this might give you a little more of a detailed insight into what to bear in mind before you buy your property, please follow this link for more information about buying your first home.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
