Should I buy now or save for a bit longer??

Should I buy now or save for a bit longer??

This is a question I am asked quite frequently. The answer really rests with the person asking the question, but before they answer the question they should consider the following:-

• Have you considered a weekly budget for when you purchase your first home?
• What weekly loan repayments can you afford?
• How much can you borrow now? – A visit to your local financial institution will determine this.
• Have you saved a Deposit? – Did you know that the First Home Owners Grant can be used with your deposit? Ask your Financial Institution how.
• What is available by way of assistance from the Federal Government eg the First Home Owners Grant. The State Government may also have incentives for first home buyers?

Did you know that each State offers different incentives eg In NSW you may be eligible for concessions on your mortgage duty and Transfer Stamp Duty. Also in NSW they offer a Bonus of $3,000 if you are constructing a new home

The Federal Government at the moment offers a grant of $14,000 (normally $7,000) for the purchase of an existing home. If you are buying a new home (one that has not been lived in before) or constructing a new home, you may be eligible for a grant of $21,000 (normally $14,000) these additional amounts for the Grant have an expiry date of 30/6/09.

• How is the housing market at the moment? – You should visit Real Estate sites. I use the Sydney Morning Herald and their links to their Real Estate sites.
• What does it cost for a home loan? This is important as the lowest interest rate may not necessarily be the best loan for you. Again visit your local financial institution to find out about their loans.
• What if you haven’t got a 10% deposit? Again you can use the First Home Owners Grant to help you with the deposit. Some lenders will lend you more than 90% of the purchase price.
• If you haven’t got a 10% deposit you can still exchange contracts by using a Deposit Bond. This is a product which by paying a small fee and by supplying certain documentation to support the application will enable a guarantee to be issued which will ensure that you can exchange contracts.

As mentioned these are just some things that you need to think about before you buy. Finding a solicitor or conveyancer is also important as they will be acting on your behalf with the legal aspects of the purchase.

So by asking these questions and by making investigations, you may be surprised how quickly you will be able to get into your first home.

Greg Davis
Area Manager
Companion Credit Union

January 27th, 2009 | 1 Comment »