In a heating property market, moving too fast with a purchase by compromising on property due diligence and proper planning can result in financial stress. Here are a few tips to help you act quickly without being reckless.
#1 Resist FOMO
the surge in property values is tempting many buyers into making hasty decisions. Don't get influenced by the numerous media stories around the rapid growth in prices. Resist giving in to the fear of missing out (FOMO). Property is a long-term commitment and involves multiple important decisions around property budget, type, suburb profile, rental yield, capital gain prospects and the right home loan product, among other factors. While you can act fast, skipping or not giving enough thought to these aspects could lead to adverse financial outcomes that may become difficult to manage in the long run.
#2 Get a Home Loan pre-approval
This is a great way to expedite property purchase. A home loan pre-approval is a formal indication provided by a lender after assessing your finances that it is willing to grant you a home loan subject to fulfilment of certain conditions. Pre-approvals have some good benefits like
- A clear idea of your borrowing power
- Quick access to funds for the right property deal
- Shorter turnaround time with your final approval
For a quick guide on Pre-approval, click HERE.
#3 Don't skip due diligence on the property
No matter how pressed for time you are, don't skip a thorough examination of the property you are looking to buy. If there is very little time left for the auction, avoid participating. Proper Due diligence of your property must involve the following:
- Pest Inspection
- Structural Soundness
- Council approvals
- Suburb profile
- Rental yield
- Capital gain prospects
#4 Engage a mortgage broker
Finding the right home loan is a crucial aspect of your property purchase journey. Save time and energy by using a mortgage broker for this task. Lenders pay mortgage brokers upon settlement of a home loan. Mortgage Broker services are therefore free for borrowers. Here's how a broker can help
- Identify the essential elements of your home loan: Maybe you have a spotless credit record and are after the most competitive rate in the market or are self-employed and unable to meet stringent lending eligibility criteria. A broker will chalk out your goals and challenges.
- Scope the market: Mortgage brokers have access to multiple lenders, giving you the ability the scope the length and breadth of the market, thereby improving your chances of the right loan match.
- Identify eligibility for government schemes and grants: Government property schemes or grants can provide significant financial respite. Your broker can help with finding schemes that you are eligible for.
- Paperwork: Loan paperwork is tedious and error prone. Your broker will handle all your paperwork and keep you posted at every step of the application process.
#5 Consider a Guarantor
If you are struggling with saving up for a home loan deposit or are having home loan eligibility issues, look for a home loan guarantor among family and friends. A guarantor is an individual who commits to making loan repayments on your behalf in case you are unable to do so due to unforeseen circumstances like loss of job, illness etc. While this sounds like a massive commitment, parental guarantee schemes where parents become a guarantor for their adult children's loans are quite popular nowadays. The benefits of having a guarantor include:
- Lower deposit for a home loan
- Better interest rate
- Improved approval chances.
- Receiving help without asking for any financial assistance
For detailed information on the workings of parental guarantee schemes, click HERE.
#6 Consider a Buyer's Agent
If your property hunt is taking too long and not yielding desirable result, a "Buyer Agent" could be the solution. A "Buyers' agent" (sometimes also known as buyers' advocate) is a licensed professional that will research, look for, evaluate and negotiate the purchase of your property for you. For more information on what a Buyer's Agent can do for you, click HERE.
#7 Be proactive
As mentioned earlier, it is possible to act fast without being reckless. If you've found the right property, connect with the seller right away rather than wait for the auction day. You may snag the property before the auction with the right offer.
Finally, engaging a mortgage broker can make your property journey a lot easier, quicker and hassle-free.
Reach us for the best way forward as per your circumstances.