For many, Halloween is the time for scary films, eerie pumpkin carvings and lolly-seeking children dressed up as ghosts and goblins. In Australia, in the midst of this is the spring property season and with so much spook about, it’s understandable if some people find buying the first property frightening.
Property ownership need not be scary, as long as one takes the time to research the available options, prepare for the lifestyle change- emotionally and financially- and think through each decision before finally making the commitment.
Mortgage Vs Asset
It is also important to remember that a property purchase provides an asset. So, while accruing the related debt may be daunting, the purchase is actually adding to the long-term financial wealth. There are no real tricks to achieving property ownership; it’s hard work but many Australians will vouch the treat is well worth it.
To put the ‘scariness’ into perspective, the top five concerns for first homebuyers aiming to purchase this year, according to a 2009 Mortgage Choice First Homebuyer Survey, was:
- the length of time it takes to pay off a home loan,
- the fear of not being able to afford repayments,
- the concern of being committed to such a large financial obligation for such a long time,
- the amount of money repaid by the end of the loan term, and
- buying the wrong home.
These are all valid concerns, especially when considering imminent rate rises, widespread pay increase freezes, high migration figures and the pressure of supply versus increasing demand. Yet, undertaking thorough research while seeking professional knowledge and support can help ensure nothing scary gets in the buyer's way.
Research and Professional Help
Asking all the necessary questions before locking in to a mortgage is important. Careful research will help understand what those questions are. This may involve searching the web, talking to friends and family about the purchase decision and the available mortgage loan choices and seeking professional financial advice.
If one is still in doubt about the ability to repay a mortgage on one's own, consideration should be given to purchasing with a friend, partner or family member. Currently, in Australia, it is found that an increasing number of first time buyers have been looking to purchase with someone else to ease the financial obligation. However, it is essential to make sure that professional legal advice is obtained to understand the roles and responsibilities of each party before committing to the deal.
Top Tips to Help Purchasing Property Easier
Consider these handy treats to help make buying the first property a rewarding experience.
- Research using new media. Online forums and social networking sites are a great place to ask questions and gather firsthand accounts of the pitfalls and benefits. This can save valuable time.
- Set up a great savings plan early on to avoid feeling overwhelmed or rushed to scrape together a deposit when the ideal home is found. Set a challenge to save as much as possible within a timeframe; this will give a clear goal post and help create a good savings habit. A small treat here and there is a good reward for staying on track.
- Practice making loan repayments ahead of time. Visit a reputable mortgage broker to help figure out what the weekly/fortnightly/monthly repayments would be and budget accordingly so when the time comes it's no real financial surprise.
- Be organised with the paperwork.Set up a folder to collect all of the documents that will be needed when applying for a home loan so when the time comes there is no rushing around searching for that important piece of paper. Documents such as passports, bank statements, recent pay slips or tax returns, plus written details about assets, liabilities and any other income will all be required.
- Seek professional help. 41% of all new Australian home loans are written through a mortgage broker. Offering a step-by-step guide to the mortgage market, they can help reduce your apprehension and empower you to make the right move.
With careful research and forward planning purchasing the first property need not be scary or frightening; it can be an enjoyable and rewarding experience.
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