1Make sure you know your limit and be prepared for the buy.
2We've all heard of 'eyes being too big for our pockets' so before you fall in love with a property make sure you've got your finances sorted.
3Inexperienced borrowers, or those who are naturally impulsive should take extra care - it's one thing to overstretch when you're buying a dress, but it's another thing when you're buying a house. It's a great idea to have pre-approval for your borrowing capacity before beginning your property search - this way you have a set limit and can't get into trouble. Make sure the Mortgage Loan Originator pulls your credit report and asks for your Income and Asset documents to verify all information prior to issuing a preapproval. What you don't want is an unverified prequalification. This will save a lot of headaches once you fine a home to place a purchase contract on.
4Don't sugar coat reality and a bad credit rating.
5It's best to be honest here (as always!) and accurately report your credit rating, card debts and personal debts. If you try to fudge the truth, this sort of stunt can stay with you forever. Not being truthful is considered Fraud.
6Lenders consult major credit reporting agencies that record debts before they complete your loan application and a tarnished reputation can prevent you from owning your ultimate dream pad not once or twice, but probably a few times over.
7Don't assume your assets substitute your income.
8When considering how much your budget is for your new home, you must consider your borrowing capacity -- your ability to make regular payments on your possible home loan. This figure is based on your income earning ability, not what assets you have.
9No matter what your assets are, what counts is your capacity to repay the loan through a regular income.
10Make sure you choose a qualified advisor. Make sure the advisor has the time to answer all of your questions and provides you with useful information with your home purchase
11Modern services bring many modern people in the know who make a living from offering advice. Vendor's agents (the agent selling the home for the current owner) also want to get the best possible price for their clients so be sure that you're not getting taken for a ride.
12While the services of a buyer's agent or a property advisor may not come cheap, the gamble might just pay off with professional opinions on the structure, age, surrounding areas, infrastructure and potential growth in price of your possible future home. Ultimately these guys are professionals and can tell you whether the property as a whole should be given the thumbs up or down.
13But be sure to select your mortgage broker, manager or lender very carefully; look for someone who will meet your needs above everything else and remember, the lowest rate is not always the best.
14Understand your mortgage options. Gone are the days when you had to save up for a 20% deposit to own your dream home. Now you can take out 96.5% (or even 100%, if you are a Veteran) of the value of the property which means you don't have to spend years saving for a deposit before getting into the property market.
15Keep in mind though, if you have less than 20% deposit there's generally a mortgage insurance involved, adding further costs. This protects the lender, not you, and the less deposit you have, the higher the fee may be - so if you have a 20% deposit, use it.
16Never underestimate the costs involved in buying a property. Remember to budget in the following when settling your finances.
Building and pest reports
Valuation costs
Application fee
Solicitor's costs
Stamp duty on properties and mortgage (Australia)
Transfer fees
Council rates
17Make sure you adequately research or check out the home first hand.
18The world may be your oyster, but if you don't want to fork out thousands of dollars for professional advisors, then the internet, dedicated research and good old fashioned haggling are just as good.
19Make sure you check the following before you settle on a property, because in this case what you don't see will definitely hurt you.
Check out the lighting and mood of the home, street and area at night
Listen for noisy neighbours from outside the property
Is public transport within walking distance?
Does the local area have all your living and social needs?
Research the area on property websites
Research the three P's (Position, Price and Potential)
Keep your eye out for information regarding trends in the area/suburb.
Check out the local council's and services' websites - does your area have what you're after?
20Make sure you keep your eyes open for any 'Cover ups' and if it's something you feel you can fix, don't forget to get that price dropped for the time and money involved in repairs!
21Take the time to figure out your mortgage repayment strategy.
22If you can afford to make more regular repayments on your home loan, go for it. With interest calculated daily and charged monthly, extra repayments will reduce your mortgage term and the interest paid on the life of the loan.
23Decide whether you're buying for living or buying for investment.
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