If you’re like one of the thousands of Australians looking to purchase their dream home in the near future – or even within several years, you may want to brush up on your knowledge of the home buying process. This article aims to provide some easy to understand terms and describes the home buying process.
A mortgage is a big deal, the funder risks alot of money and have been increasingly careful about who they lend money to as a result of the global financial crisis. To qualify for a mortgage you will need a deposit and good credit. Having a bad credit rating is not the end of the world, with some help from our team you may be able to remove some or all of your bad credit rating, find more out here.
How much am I able to borrow?
Whoever your funding provider, they don’t want you to borrow too much, so that you do not get overwhelmed with repayments that you cannot afford. Your funder will look at your income and expenses and ensure that you have enough cash flow to make regular repayments on your loan.
Refinancing a Mortgage
If you have previously signed a mortgage and have realized you are paying too much, don’t worry! A refinance might be your best option, and the sooner you do it the better. The market changes, and your repayments should reflect this. Refinancing is not always the best option, it depends on your personal circumstances, but in most cases it can be several thousands of dollars of difference.
Bidding in a House Auction
The premise behind a house auction is to have buyers actively compete against each other in order to drive the sale price higher. House owners will usually set a reserve price for the auction and if the amount bid does not reach this price they are not legally required to hand over the house. Sometimes the seller will instruct the auctioneer to bid on their behalf in order to push the price up over the reserve. Auctions can take place at the house itself or in an auction room. Upon winning an auction you must put down a ten percent deposit, and if you happen to not follow through with the auction you could very likely lose your initial deposit
I’ve found my dream home, now what?
Before you buy, it might be a good idea to get an independent building and pest inspection on the house. Once you’ve found your home you’re free to make an offer to the sellers real estate agent who will pass on all potential offers to the sellers. If all goes well and the sellers are happy with your offer they will counter-sign your offer (or contract of purchase) and you will be informed of their agreement to the sale. At this point the contract becomes legally binding for both parties involved. If your offer conditional you are still able to withdraw if the conditions you specified are not met, however if they are you will be required to put down a ten percent deposit, and the remainder of the sale amount will be transfered on an agreed date, at which point the house is yours!
Reduce Loans are able to help out with some of the questions you might be asking yourself, keep an eye on this page however because it is updated regularly. If you can’t find what you are looking for feel free to call our staff on 1300 733 823.
