Putting yourself in a strong position to buy
The time between making the decision to buy a home and the turning of the key in your new front door can feel like a long stretch, but there are steps you can take right now to put yourself in a strong position when it comes to buying.
By consulting with a mortgage broker early on, you’ll be well-versed in the different types of loans available to you. The broker will also be able to guide you through the process and tell you what to expect. It’s helpful to build the relationship between you and your broker as soon as possible, so that communication is clear and trust has been established. Having this expert support from your broker will mean you’ll feel more confident to ask questions and better placed to make decisions along the way. How early should I contact a mortgage broker? It is never too early with many people such as first home buyers contacting a mortgage broker 1-2 years away from purchasing.
A pre-approval (also called a conditional approval) is an indication from a lender that your loan will be approved. Pre-approvals are generally valid for up to six months, and it’s important to note they aren’t a guarantee of a loan. It’s useful to have though because they can help you work out your borrowing power, and also show vendors you’re serious about buying.
It’s worthwhile keeping an eye on current sales in the areas you’re interested in. Read through property magazines and websites and keep a list of what you’re looking for. You can also sign up for property alerts and contact real estate agents to see whether they have properties in your price range (some of which won’t be publicly advertised). Get to open houses and auctions to see firsthand what the market is like. Not only will browsing give you a realistic idea of how much money you’ll need, but visualising your new home can keep you feeling motivated throughout the process.
To help you reach your financial goals quicker, review your current everyday expenses and consider what can be removed or reduced to assist building your savings.
While it can be hard to wait for your new home to come through, being prepared in the meantime will make it a smoother experience. Putting yourself in a strong position to buy can be done in small steps, with gradual moves towards your end goal.