Things to know before buy a new home – Skad Real Estate
Things to know before buy a new home

Whether this is your maiden chance buying a home or you’ve done it before, the real estate market can be difficult to navigate even for the most seasoned of us. Here are the top things you should know before you start playing. If you are looking for the houses for sale Thomastown, keep the following points in mind – 

The deposit

First and foremost, the more you save for a deposit, the less you will need to borrow from the bank, allowing you more room to cover any additional expenditures associated with home ownership. The deposit is a percentage of the property’s purchase price that represents your commitment to the property, thereby giving you partial ownership. So, before you go for property for sale in Craigieburn, be careful about your capacity of deposit.

Deposits can take years to accumulate, so understanding this phrase early in the buying process is critical. Typically, a five to twenty percent deposit is required; however, this can vary depending on your income, budget, and whether or not you have a guarantor, in which case a lower deposit may be required.

Lender’s Mortgage Insurance (LMI)

If you don’t have a 20% down payment, you may be compelled to pay for Lenders Mortgage Insurance, which protects the lender in the event you default on your mortgage payments. It’s crucial to understand that LMI is intended to protect the mortgage lender, whereas mortgage protection insurance is intended to protect you, the borrower.

The guarantor

When applying for a house loan, a guarantor can provide additional security. A guarantor is usually a third party, such as a parent or a family member. If you don’t have a large deposit, a guarantor can help by providing additional security – often, the guarantor’s existing home equity would serve as this security.

A guarantee is not required to make any loan repayments, but if the borrower fails to do so, the lender will turn to the guarantor to make the payments.

The silent costs matter

  • Council rates
  • Stamp duty
  • Loan fees
  • Additional insurances
  • Conveyancing
  • Building and pest inspections

The above points are vital to understand before you finalise the payment. Overlooking the costs can be really difficult for you to manage later.

Choosing a home and suburb

It all boils down to your long-term housing goals when deciding where to buy and what to buy. If you’re looking for an investment property, your criteria will differ from those who are looking for a place to call home.

If you’re looking for a long-term property as your first buy, the best suburb for you will depend on your own preferences and your budget. Do you intend to start a family in this house? Consider purchasing a home near schools, public transportation, parks, and other amenities. How far will you travel to get to work? These are the kinds of questions you should ask yourself before taking out a mortgage. The suburb you choose is determined by your lifestyle and long-term aspirations.

Before buying a home, you should research the median house price in the region, as well as what other houses are selling for, if there has been growth or drop, and how many listings are available for sale.

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