We have a belief that “The earlier I can see a client the better off that client will be”. We like to point out that there are many issues and questions you need to think about before you sign a purchase contract.
That is why we take every client through our 7 step process to make sure you have all aspects covered. In many cases you may need to seek advice from your accountant, solicitor or financial advisor but at least you will be armed with what questions to ask.
Our 7 Step Process
1) Start of the process (How Much Can I Borrow?)
This is often one of the first questions we get asked so as part of this process we would cover the following issues:
- Income (Self Employed or Salary paid)
- Deposit (Savings, Equity, Gift, First Home Owners Grant)
- Existing Commitments (Home Loan, Personal Loans & Credit Cards – limit & balance)
- Family Situation (Number of Adults and Children)
- The power and confidence of Pre-approval
2) Who will own the property?
This is one of the most overlooked issues who will own the property, so before you sign a purchase contract you should discuss this issue with your accountant and / or solicitor.
- Mr & Ms
- Mr Only or Ms Only
- Individuals as Trustee for a Discretionary (Family) Trust
- Company as Trustee for a Discretionary Trust
- Unit Trust
- Hybrid Trust
- Tenants in Common
- Joint Tenants
3) Property Type
As you can appreciate not all properties are created equal and we have highlighted below some of the different types available. Depending on what type of property you are looking to purchase it may be subject to different lending criteria.
- Units & Apartments – Size does matter, Studios, Holiday Accommodation, Serviced Apartments & Student Accommodation
- Rural Properties – Size does matter, Hobby Farm, Income Producing & Location
- Standard Residential
- Other important issues include – Environmental (rivers, power cables, recent floods etc) & Multiple dwellings on one title
- Vacant Land, Construction, House and Land Packages
4) Product Selection
Before we make any recommendation as to which lender you should consider it is important we look at the loan options available. As with most things in this world we live in – you get what you pay for. And this is also true when it comes to residential loans. The more features and benefits you have with a loan generally (not always) the higher the rate. However if you can use the extra features to pay the loan off quicker it could still be worth considering. Some of the loan types available are:
- No Frills (Basic Variable)
- Standard Variable (Honeymoon & Fixed Rates)
- Flexible Options (Line of Credit, 100% Offset Accounts & Loan Transaction Loans)
5) Lender Selection
Once we have decided on the best loan type we can then look at which lenders will suit your needs some of the points we consider here are as follows:
- Credit Policy
- Interest Rates
- Features and benefits
- We provide you with a detailed report with our lender and product recommendations in a format that is easy to understand.
6) Application Process
Once you have made your decision we then are ready to get the application to the lender ASAP. It is still surprising the number of different elements involve with this part of the process but you don’t need to worry it is our job to deal with it and get your loan approved as soon as possible.
- Supporting Documentation
- Lender Application – paper based or online lodgement
- First Home Owners Grant (FHOG) Application
- Deposit Bond Application
- Pre-approval through to Full Unconditional Approval
- Mortgage Documents & Letter of Offer
7) Other important issues
Given that buying a home is one of the biggest financial decisions of your life it is important that you consider the importance of Insurance.
- Building & Contents
- Income Protection, Life Insurance, Total & Permanent Disablement insurance & Trauma Insurance
Most people have no problem understanding the need for protecting your home with a good building and contents insurance policy however it’s as equally important to consider what would happen of you died or were injured and unable to work for a long period of time – how would your family survive?
My father lost his sight by the time he was 40 and that was a massive issue for him and our family to deal with but he was smart enough (I wouldn’t tell him that) to have had adequate Life and Income Insurance so we could survive financially.