When you’re house hunting, it’s easy to get distracted by aesthetics. This checklist will help you focus on what’s really important at a property inspection.
Is it right for you?
Is a spare bedroom, second bathroom or ensuite a must? Will everyone be safe or comfortable climbing stairs? Does your dog need space to roam? Be realistic about the features you can’t live without.
Floor plan and room sizes
Walk around the property to get a sense of how one room flows into the next. Check whether the rooms are the right size and shape for your existing furniture and appliances. If not, are you prepared to splash out on replacements? The rooms should also be practical. For example, does the kitchen layout suit your needs? Is there enough space for a dining table?
Orientation and natural light
Check where the property’s windows are, and whether trees or nearby buildings will block out sunlight. If the lights are on, switch them off to get a feel for the natural light. The inspection may have been timed to maximise natural light.
Consider whether neighbours can see directly into the property. It’s also worth checking whether they’ve lodged any development plans with the council. Walk around the block to see how well other properties in the area are maintained, and to listen for noisy pets.
If there’s off-street parking, are there enough spaces? Check local parking restrictions, and how much a resident’s or visitor’s parking permit costs. Consider how hard it would be to find on-street parking at peak times.
Heating, cooling and ventilation
If the property has heating or air conditioning systems, check that they work, how old they are and if they’ve been recently serviced. Keep in mind that high ceilings can make it difficult (and expensive) to heat a room. Ventilation is especially important in kitchens and bathrooms, so test the extractor fans.
Check whether the water pressure’s up to scratch, especially in the shower. Can you get the right mix of warmth and pressure, or will it cost you to change this? Consider whether the hot water heater is big enough for your family’s needs. And don’t be afraid to flush the toilets.
Do the built-in wardrobes suit your needs? If there aren’t any, will the bedroom be large enough for a freestanding wardrobe? If there’s a garage, check that it’s big enough for your car and any other items you’d like to store.
Fixtures and fittings
Are there enough power points? Are they in convenient locations? Check behind the furniture, because they may be hidden. If the house has blinds, curtains, flyscreens, light fittings or other fixed features, they should ideally be clean and in good working order.
Common walls, floors and ceilings can be a real issue, as can communal areas such as stairwells. Consider how well-insulated the property is, how well-fitted the doors and windows are, and whether there’s carpet or double glazing. Traffic, shared courtyards and nearby schools and sporting grounds are all potential sources of noise.
Outdoor maintenance can be hard work. Do you have the time or money to mow the lawn, weed the flower beds or clean the pool?
Will you need to install or repair security doors? If the property has a shared entrance, check whether the main door locks and if the other owners and tenants generally keep it closed.
A building inspection covers the property’s structure, but there many other things to consider. Check for what’s important to you, so you can make the best home-buying decision.
There are a range of home loans available in Australia, so it can be hard to understand their features and whether they are right for you. This guide explains all you need to know.
Variable loans are loans that are subject to interest rate fluctuations. Whenever your bank increases or decreases interest rates, you will end up either paying more or less for your loan, depending on what the bank has decided to do.
A typical owner-occupied mortgage is taken out over 25 or 30 years, although you can reduce the overall term by making higher or more frequent payments. Mortgages are either based on principal (the amount you borrowed from the bank) and interest (the amount you pay back for having borrowed that money) loan repayments, or interest-only repayments (generally available for 1-5 years for owner occupied loans and 1-10 years for investment loans) where none of the principal component of the loan is paid down.
Fixed loans allow you to lock in a specific interest rate over a set period of time, generally between one and five years. This loan is popular among borrowers who want to ensure their repayments don’t rise. The main risk is that if variable rates fall, you are locked in at a higher rate. The cost of breaking a fixed rate loan contract can be substantial, and there can be financial penalties for making additional payments.
You can take out a mortgage with one portion of the loan variable, and the other fixed. In many ways, this offers the best of both worlds and you have the flexibility to repay more on the variable loan and reduce risk through the fixed loan.
Mortgage lenders require you to provide evidence of your ability to meet loan repayments, but this can be a problem for non-salaried workers such as the self-employed. Low-doc loans require less proof-of-income paperwork, but the interest rate levied is often higher than the standard variable rate.
Professional or packaged loans
Some lenders offer mortgages that provide ‘lifetime’ discounted interest rates, fee waivers and linked savings accounts and credit cards. These options are generally offered on high loan amounts.
Non-genuine savings loans
Lenders prefer borrowers to show they have the ability to save funds over time to cover their repayments. If a deposit is accrued quickly due to an inheritance or from other sources, lenders may provide less funding and require lenders mortgage insurance. Lenders mortgage insurance is a one-off insurance payment that covers the bank in case you can’t make your repayments. It is usually required for home loans with a loan-to-value ratio (LVR) over 80%.
These loans allow amounts of finance to be drawn down progressively to cover the various stages of a construction project. Repayments (generally only on interest for the first 12 months, then principal and interest thereafter) are only made on the amount of the loan facility that has been drawn down. However, there are line fees on the undrawn amount, or in most cases on the total facility limit.
This is a way of tapping into equity in an existing home and drawing down funds as required for different purposes, such as renovations. Similar to a credit card, repayments are only made on the amount drawn down. Line-of-credit loans are often interest-only for a significant period, but can revert to principal and interest repayments down the track. Most lenders charge extra for line of credit accounts, either through a facility fee, undrawn funds fees and/or a higher interest rate.
Bridging loans are designed as short-term financing options for borrowers who need funding to buy a new residence before selling their existing home. The interest rates on these loans are higher than the standard variable interest rate.
The rules around borrowing funds within a self-managed superannuation fund are complex. Borrowings with a SMSF must be undertaken through a limited recourse borrowing arrangement, which limits the recourse of the lender to a single asset.
With mortgage lenders offering so many different products, getting professional advice is a must. A mortgage broker will support you with recommendations about what’s best for your personal circumstances.
For more information on home loans, talk us today.
Using a mortgage broker to help you choose a home loan can save you considerable time and could result in huge savings. However, before you decide on a broker, you need to make sure they’re going to meet your needs. Here are some questions to ask.
1. How long have you been a mortgage broker?
It may help you feel more comfortable with your decision if you know the person you intend to choose as your broker is experienced and has a solid track record. This question will let you know how long they’ve been a broker and what sort of lending they’re involved in. Also ask them to provide client testimonials, if possible.
2. Are you a licensed broker and a member of a professional mortgage industry body?
It’s important to check a broker’s qualifications and credentials. Major lenders require that brokers complete at least a Certificate IV in Financial Services and either hold an Australian credit licence or be authorised under a licensed home loans aggregator or lender. They should also be a member of the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).
3. Do you have access to a range of different mortgage lenders?
The mortgage broker you choose should be able to offer you loans from a large number of Australian lenders. Ask how many they have access to and if they can provide you with a full list. That way you can have confidence in their contacts and know that they have a wide selection to choose from.
4. How do you determine the best lender?
Your broker’s primary job is to source the best home loan for your specific needs. Securing a low interest rate is key, but a broker should also assess your requirements and then present a number of product options. They should be able to demonstrate how they research and rate their selections, and which loan best fits your circumstances.
5. What fees and commissions are you entitled to?
This question may seem blunt, but keep in mind that brokers generate income from every transaction they complete. It’s good to understand how they are paid, and how that may affect you.
The broker must disclose all payments and commissions they receive.
6. How much can I borrow?
As part of the process, a broker should provide an idea of how much you can borrow based on your deposit, income, assets and liabilities. This will help you understand what type of property you can afford to buy.
7. Do you help with first home owners grants?
First-time home buyers may be entitled to government grants and other incentives. Your broker should know what’s available in your state or territory and assist with any paperwork.
8.What’s the best loan structure for me?
A good broker should advise you on which loan structure makes most sense for you. Ask whether a variable interest rate loan is best, or whether you should have a loan with split portions providing both variable and fixed rates.
Does it include an interest offset account, a redraw facility, and should you pay principal and interest, or interest only?
9. What are the next steps?
Ask about the process for getting your loan application underway, including any information and documentation you need to provide them as the intermediary between you and the lender. Your broker should be able to give you a checklist.
10. How long will it take?
This will determine how quickly you can start shopping around. Ask the broker to estimate when you should get pre-approval from the lender and also how long the full approval and settlement process should take from start to finish.
To get the ball rolling on your home loan, talk to us today.
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Happy Valley Shopping Centre
50 Kenihans Road
Happy Valley SA
Call 0400 295 004