06 April 2012
Hi all,
I have purchased a unit, and have been asked by friends what steps are involved.
So here goes :)
The following steps are what happened when I bought my unit, in NSW, Australia.
1 - Find a home loan with the best interest rate.
Brokers (eg Aussie Home Loans / Mortgage Choice / RAMS) will be able to help you out for free, however as of today, uBank has the best deal and brokers can't offer this. You will be locked into the mortgage for about 5 years, so if you don't get the best deal, don't stress.
If you don't already have a solicitor, have one ready to go. Solicitor fees will probably be around $2500.
2 - Get a pre-approval for a home loan, this will tell you how much you can borrow. Never go over your limit!
3 - Find your new home!
Make a checklist of things you want in a house and get out there looking. Real estate websites (eg www.domain.com.au, www.realestate.com.au) will help you find the places you are interested in... you will also get an idea of what prices people are currently paying.
Try to look past cosmetic things like paint/carpet/furniture.
4 - Make an offer on the place you like. The real estate will pass this offer to the vendor and if accepted.......
5 - Give a copy of the contract to your solicitor and have the solicitor organise any reports (strata/building inspection/pest inspection). Strata reports currently cost approx $270.
6 - Sign the contract your solicitor has approved and hand over 0.25% (non-refundable) deposit to your solicitor. You may have a 5 day cooling off period.
7 - Advise home loan lender to proceed with the loan, give them the 1st page of the contract.
8 - Before the end of the cooling off period (5 days), the remainder of the deposit (usually 10%) must be paid to the real estate. If you don't have 10%, your lender will be able to give you this. You should tell your solicitor this upfront, as this will change the contract.
9 - Your solicitor will request a bank cheque for the entire stamp duty. Google stamp duty and you can use online calculators to estimate this. This is different for each state/territory.
10 - Your lender will mail you forms to complete. Sign these and return them to your lender promptly. If you put it off, your loan may not go through on time!
If the bank requires proof of home insurance (and you are covered by strata), then purchase a certificate of currency online, approximately $60.
11 - Settlement date (standard is 6 weeks) will be stated on the front page of the contract. Use this time to start packing, organising any renovations or tradespeople, organising utilities to be connected. BEWARE settlement dates can change.
12 - On settlement date get the keys off the real estate, and run over to your new home and pop a bottle of bubbles to celebrate :) A big congratulations from me!!
13 - Phone your lender and ensure that their automatic withdrawals match what is convenient for you. (ie with your pay schedule).
14 - Once you are settled into the groove of paying your mortgage, try to make additional repayments when possible.
15 - After your lender lock-in period (5 years), check again for the best mortgage deal, and if you're not getting the best deal - see what your bank can do, or change to a better deal.
All contracts are different, and you may have a long settlement, and no cooling off period. These are things that your solicitor can let you know.
Happy house hunting :)
Ms Bender
