First National Real Estate

“BORROWING POWER” IS A TERM YOU’LL OFTEN HEAR USED TO DESCRIBE THE AMOUNT YOU CAN COMFORTABLY BORROW TO FINANCE YOUR PROPERTY PURCHASE. DO YOUR SUMS 1. TIPS The starting point is saving towards a deposit but it’s important to understand all the costs associated with home ownership, such as mortgage insurance, taxes and legal costs. Starting a rigorous savings plan and doing all the sums can help you see what the hurdles are and how you can best plan to tick them off. 2.3. Get professional advice. Sit down with a range of lending institutions to fully learn about and understand the options and possibilities. Even if you don’t act, you will properly understand where you are at and what you need to do. Be flexible with your expectations. Units and townhouses are available in many areas at lower prices and could provide a feasible market entry point. The key is to get into the market, pay down your mortgage and establish equity in the home as a basis for future financial options and flexibility. Then you are able to think about an up-grade or a move to a suburb you’ve always wanted to live in. Your borrowing power is determined by your current income and financial commitments as well as your savings and credit history. You should carefully consider your current and future living expenses so you’ll be assured you can repay your loan and maintain the quality of lifestyle you’ll require. One of the biggest initial outlays you’ll face is, of course, the deposit. This is usually 10 per cent of the purchase price but don’t forget that the deposit, like many elements of a property purchase, can be negotiated. It’s not uncommon for a property owner to consider a 5 per cent deposit in some circumstances, so don’t be afraid to ask your agent if your funds are stretched. In addition to the purchase price of your new property, you will need to pay for things like Stamp Duty (on the purchase price and the loan amount borrowed), conveyancing fees and possibly mortgage insurance. Stamp duty scales vary from state to state but your First National agent will happily explain what is applicable in your home state. Check if you’re eligible for the First Home Owner’s Grant by visiting firsthome.gov.au PROPERTY MANAGEMENT GUIDE 8