6 Steps to Buying Your First Home
Buying a home can seem like a very complicated process, but at Toyota Money we try and make it as simple as possible for you.
To help you navigate the buying process, we’ve broken it down into 6 key stages. We hope you’ll find it simple and easy!
1. Find out how much you can afford to borrow.
It is important to get an indicative home loan offer before you start looking at properties so you know what you can afford. The amount you can borrow will depend on your income and existing financial commitments. Although home loans for 100% of the purchase price are available in the market today, these products tend to have higher interest rates whilst lower interest rates are available if you have a deposit, usually at least 5%. This also helps to show the financial institution you have the financial discipline to save for a deposit and are willing to contribute some of your own money to the cause. You will also need to think about the upfront costs of buying a house or apartment such as legal costs and stamp duty, all of which can add up very quickly. Use our calculator to get an indication of how much you can borrow or call 1800 262 123 for an exact amount.
2. Find your home.
What you want and what you can afford are usually two different things. It's often said that location is the most important consideration in buying a home and you certainly need to decide where you want to live, and the type of property you want to live in. It’s often easier to work out your requirements at the start and attack it as a project. Things you'll need to consider include: type of property, how many bedrooms, whether you need a garage, garden size, schools, amenities - the list goes on. You might like to consider a list of 'essentials' and a list of 'preferables'. Once you've decided on your requirements, ask a number of local real estate agents to send you details of suitable properties.
3. Make an offer.
When you've found the right property, and viewed it a couple of times, it’s time to make an offer through the real estate agent. Remember, the sale price is what the seller hopes to get, not necessarily what they realistically expect - and you may be able to agree a lower price. Your offer should be conditional and subject to a property, survey (if you are buying a house), strata inspection (if you are buying a home unit) and subject to satisfactory contract terms. Alternatively you may need to go to an auction.
4. Finalise your home loan.
Once you’ve found the property of your dreams, the loan that was approved “in principle” now needs to be arranged based on the home you want. Toyota Money can help you through this process and we will arrange for a valuation to be done. Toyota Money offers one free valuation where required.
5. Appoint a solicitor/conveyancer.
Conveyancing is the legal transfer of a property from one owner to another and it makes sure that the property to be purchased has clear legal title. Conveyancing also involves carrying out all the necessary title and property searches to check the title and to identify any existing or potential problems with the title to the property.
There are three main stages involved in any conveyancing transaction:
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Sale agreed
Includes negotiating contract terms and agreeing settlement (ie moving in date) and completing pre-purchase inspections such as pest report, survey, strata inspection and other searches as considered necessary.
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Exchange of contracts
Payment of deposit and formal exchange of contracts on behalf of the purchaser and vendor. Following exchange mortgage and title transfer documents are prepared and signed by the parties in anticipation of settlement (ie completion of the purchase/sale). Stamp duty on the sale and mortgage duty is generally paid at this stage or in some instances this can take place by agreement following completion.
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Completion
This is when the contract for the purchase/sale is finalised by the payment of balance of purchase price and settlements, handover of title deeds and registration of the transfer at the land titles registry.
6) Move in!