27 Aug Preparing to Buy a Property
If you’re looking at buying a property in the near future, there’s a lot of preparation you can do beforehand to ensure the process is as smooth and efficient as possible. In this real estate vlog Henry talks about a few steps you can start taking as you prepare to buy a home.
“Hi, I’m Henry Wong. We’re here to discuss getting ready to buy. So you’re looking at buying a house or a unit or apartment sometime in the future. When you’re getting ready to buy, a good thing to do is save for a deposit. Now ideally you want to save for 20% deposit. Now if you can’t get 20%, aim for 10% deposit.
Another thing that you’d also need to save for is the stamp duty, so understand that whatever you have in your bank account and you say oh, I’ve got 20% deposit, you have to understand that the stamp duty is not part of the deposit, it’s in addition to the deposit.
Number three, what you also want to get is a preapproval. Now what I mean by preapproval is that the bank has all your financials assessed already or assessed to a certain extent and have all necessary documents to process the loan. With regards to the preapproval, the bank needs for your latest payslips. Sometimes they may need a letter from your employer, just need to ask your bank that or mortgage broker, so your letter of employment. They just need to confirm that you’re actually currently employed. I’m just basing it as if you’re a PAYG, you work for someone else, you’re not a business owner.
Also with regards to a preapproval, you need to understand that the bank will ask you is it okay if we do credit check, so you need to fill out some sort of form with the bank saying that you allow them to do a credit check. Now what the credit check is, it checks every single place that you owe money to. It could be to the government for speeding fines, it could be I’ve actually borrowed from, for example, ANZ Bank, a personal loan. Anything that you don’t disclose to the bank, you will come up with a credit check.
You actually can’t hide it, so the best thing you can do is to actually be completely honest to the bank and say look, I have a personal loan, I also have credit cards, I owe someone else some money. You want to be as honest as possible because at the end of the day they’re going to find out. You can’t exactly hide that. With the preapproval, payslips, letter of employment, credit check, make sure the bank has all the updated information about yourself. If it’s not the bank that you’re currently banking with, obviously they need to have latest bank statements. That’s what I mean by getting ready to buy.
Also with getting ready to buy, you need to think about when are you looking to buy? Are you looking to buy 12 months out or are you looking at buy in two years time? If you’re looking at buying 12 months out or six months out, make sure that you have your expenses in order. When the bank actually looks at lending you money, they don’t just look at your income, they also look at your living expenses, how you live. Do you go and buy takeaway every single night? Do you go out to the movies a few times a week?
They actually look at all your living expenses, so you need to be careful on that. You might want to, I guess, pull back a bit and just monitor your expenses, especially if you’re going to go borrow in the next six, 12, 24 months. Also, when you’re getting ready to buy, one of the things obviously you need to do is you need to do your own research as to where you want to buy. What can you afford?
Number six is you need to take into account when you buy, I strongly suggest you get a building and pest inspection unless it’s a vacant land. Then there’s no need to get one done. Always get a building and pest inspection report, Kind of get one for yourself or if there’s already one, have a look at it. If you’re happy with that, then so be it. If not, get your own building and pest inspection report.
Number seven is you need to understand that you need to pay a solicitor. You can be self-acting, but I would suggest you get a solicitor. Generally when you buy the solicitor’s fees are more expensive than when you sell. Now when you get a solicitor, make sure you ask them what is the total cost, because most of them will quote you, these are our fees, but you have to understand the solicitor also charges search fees, the government search fees, so that’s their fees plus the search fees and those together becomes your total fees.
You need to make sure you get that really, really clear. Are these the total fees, your fees plus search fees or are these just your fees? Make sure you get clear cut about the actual fees you need to pay a solicitor. Also the building and pest inspector, generally there’s actually one inspector that does both the building and pest or it could be two. One does a building, one does a pest, so obviously you need to pay the money and you need to make sure that you’re there on site or your family member or friend is there onsite at the inspection.
It goes for about an hour to an hour and a half, sometimes two hours and make sure that you’re happy with the place because with the building and pest report, it’s quite thick. That’s pretty much all you need to primarily watch out for in most cases when you’re getting ready to buy.”