Buying a new home is one of the most important decisions you will make. Before making this decision, take time to think about what type of house or apartment attracts you and why? Is it because there’s more space for children’s toys; closer proximity with family members; less traffic on your daily commute trips into work each morning or maybe just wanting an escape from renting…the list can go on and on.
Once you’ve figured out what you’re after, you might come to the conclusion that you’re basically happy where you are and would be better off renovating your home to make the changes you need. Answering these questions at the beginning of the process will save you a large amount of time.
Step 2: Are you making the most of your home equity?
If you own a home that has increased in value over time and have made extra mortgage repayments, it’s possible to use this equity for purchasing your next house and you may hold significant equity in your current home.
You may be able to use this equity in the process of purchasing your next home, for example, as security for your next loan, or to help with your deposit.
To get an idea of the equity you hold, you’ll need to get an estimated market value of your current home. The Team at Auspak can arrange an up to date bank valuation on your property. Your equity will be the difference between your home’s market value and the amount you still owe on your home loan.
Step 3: Get the most out of your home loan by budgeting.
Now that you have a rough idea of what the home you’re looking for will cost, and the equity you have available, you need to get an understanding of how much you can afford to borrow and repay.
Budgeting for future expenses is important as over committing yourself can put you under financial pressure. The Team at Auspak can help you create a budget and lay out all future expenses you might come across.
Step 4: Selling vs Buying, what’s right for you?
Now you know your budget, next comes the age-old upgraders’ question. Is it better to sell or buy first?
Selling your current home first is generally considered the safer option, while buying first may give you more opportunity to find your ideal next home. There are both pros and cons to each scenario, the team at Auspak can help work through your current circumstances and provide recommendations on what would best suit your situation.
Step 5: Obtain a pre-approval
Alright you’re getting serious now. Even if you’re in the ‘sell first’ camp, you need to start thinking about getting your finances in place to buy – as you may want the gap between the two settlement dates to be as close as possible.
Getting a home loan pre-approval from a lender is a great way to get the confidence to start your property search. Pre-approval is an indication of your ability to borrow funds from a lender (based on the information you’ve provided them). With this approval, you can negotiate on a property purchase, knowing the bank will support you with finance.
It will also allow you to show real estate agents and buyers that you’re in the game and are more likely to afford the property, whilst also allowing you to bid at auction and giving you an idea of what price range to keep your property search within.
Step 6: The checklist that will make your search easy and simple
You’ve got your pre-approval sorted, now the search begins. You’ve got a good idea of what your budget is and what you’re looking for, which helps narrow the field. Now it’s just a matter of finding the home that’s right for you.
You may have to attend quite a few open homes and it can be hard to remember which home is which. So, a good tip is to keep a little checklist of the things you like and dislike with each home and take lots of photos to help trigger your memory.
If you’re selling and buying at the same time, it can be quite stressful. So it’s important to do as much as you can to get your finances sorted and do your research upfront so you’re ready to go when you find your dream home.
Step 7: Make an offer and finalise your finances
You’ve found a home you like. It ticks all your boxes, or most of them, and it’s in your price range. If you’re confident that this is the home you want and can afford, and all the inspections check out, it’s time to make an offer. Once you’ve agreed on a price with the seller, chat to the Auspak team to organize your full finance approval.
If you are yet to sell or rent out your home, it’s time to get that into full swing to minimise financial losses and to get ready to move into your new home.
Get a helping hand from the Auspak team
Our Auspak home loan specialists are here to help. No matter where you are in the process, whether you’re trying to calculate your equity or obtain pre-approval, they can talk you through all your options and give you a clearer picture of your next steps.