When it comes to life’s biggest purchases mine include my Apple Mac, my car and a designer handbag here and there. Recently though, I’ve been preparing to make my biggest purchase yet: a home.
Buying property is currently a totally in-fashion topic amongst my circle of friends.
Hitting this new life stage has seen our conversations shift from men and manicures to the other ‘M’ word: mortgages.
Whilst this fashionable topic of conversation seems far less fun, if like me you’re in the market for your first abode, it’s a must-have conversation that needs to be had.
Just as an FYI, you should know that this post is an advertorial by BOQ. But all opinions expressed by the author are 100% authentic and written in their own words.
Getting to that first rung of the property ladder can seem completely overwhelming and here you have it fellow foundation seekers, the ultimate first home buyer’s checklist.
If you’re looking for more information on the ins and outs of bank valuations and home loans, pop in and see the team at your local Bank of Queensland (BOQ). They’ll be more than happy to help.
1. Check Your Credit Report
A bad credit rating can be likened to getting a now ex-lovers name tattooed on your arm. In other words, not going anywhere in the foreseeable future. With the credit reporting laws changing in March, banks will be able to access new information on your credit health so it pays to ensure that you’ve got no hidden nasties lurking that could affect your chances of applying for a mortgage. You can obtain a free copy of your credit report via a national credit reporting agency such as Veda.
2. Reduce Your Credit Card Limit
Got a sky high limit on your credit card? Whilst some think that this will look favourably, at some banks it can actually decrease the amount you can borrow (even if you’ve restrained yourself at the shops and there’s no balance owing on it) by up to $10,000 for every $1000 of your limit.
3. See An Expert
With a plethora of loan options out there, it’s normal to feel like a damsel in distress. Book yourself in to have a chat with a home loans expert (I visited the home loan gurus at BOQ) who will present a range of options tailored to your specific situation.
4. Set Yourself a Budget
Whilst the bank might be prepared to loan you a million bucks, you need to be realistic with yourself about the repayments. Set a budget that will fit in with your lifestyle.
5. Get Pre-Approval
When your dream home comes along you want to be ready to act. Get pre-finance approval prior to looking for a property so you’re good to go when The One comes along. I found out about BOQ’s Clear Path variable rate home loan which had a really competitive interest rate and heaps of great features like flexible repayment options, 100% mortgage offset, free redraw and more.
6. Create Dream Home Check-List
Create a check list of your desired property criteria (such as must have walk-in wardrobe and wine cellar) and take it along with you to property inspections so you can find the one that ticks all the boxes!
7. Obtain the Strata Report
Once you think you’ve found The One, check the records of the body corporate (for apartments) to see if there have been discussions or decisions on building defects, repairs and maintenance.
8. Hire a Pro
Hire a professional to inspect the property and conduct a pre-purchase inspection for any potential issues such as termites.
9. Read the Fine Print
It pays to read the fine print. Be clear on exactly what’s included in the contract such as appliances and curtains. For apartments you’ll also need to check the strata plan to make sure that everything is on title e.g. car spaces/ external storage.
10. Be Prepared for the Bank Valuation
A friend of mine found her dream apartment only for the bank to burst her first home buyer bubble by valuing the property at less than the price she had paid for it. Financial institutions usually only lend a percentage of their valuation price, which can mean having to fork out more pretty pennies than you intended. Moral of the story: Don’t cut yourself too short incase potential problems arise. If you’re looking for more information on the ins and outs of bank valuations and home loans, pop in and see the team at your local BOQ. They’ll be more than happy to help, they definitely did for me.
Got a hot tip for First Home Buyers?
Visit the BOQ website for all of your financial queries.