FOR the most of us, making the transition from the rental market into the home ownership bracket will be one of – if not the biggest – financial commitment we will take on in our lives.
The idea of a long-term monetary obligation may stir fears in potential investors, but it doesn’t have to be daunting if you do the right amount of research before signing on the dotted line.
Independently owned mortgage broker Mortgage Choice has compiled a list of tips for those seeking to enter the property industry.
1. Do your homework. Save time by utilising property and home loan websites, online forums and loan comparison facilities. Ask questions, compare ideas and gather potential pitfalls and benefits.
2. Start saving now. This gets you into a saving regime, making it easier to place a deposit for your property.
3. Practise your repayments. When it comes time to make actual loan repayments, there will be no financial surprise. A professional mortgage broker can help determine an estimation of your repayments.
4. Be application ready. Prepare all necessary documents and ensure they are available when applying for a loan application. Items such as personal ID, bank statements, tax returns and asset details are good examples of documentation that may be required.
5. Seek help. Visit professionals in the industry and empower yourself with knowledge to make the right move.
Mortgage Choice spokeswoman Kristy Sheppard said many renters often feared the unknown and lost sight of the end goal when entering the property market.
“Taking out and repaying a home loan need not be scary, as long as time is taken to research loan options,” she said. “Know and set limits, understand short and long-term personal objectives, budget accordingly and thoroughly think through each decision.
“A common fallacy is that there will be no money left over for splurges, outings or special occasions. But mortgage stress can usually be avoided by setting a realistic budget from the beginning, factoring in interest rate rises, borrowing within your means and avoiding unnecessary post-purchase debt.”
Ms Sheppard also advised that such a serious commitment should only be made after careful deliberation. “Undertaking thorough research while seeking professional knowledge and support can help ensure nothing scary comes your way,” she said.