Are you familiar with real estate investment in Australia? Before you invest a dime, here are some frequently asked questions which you should consider for a successful venture.
How do I know I,am ready to invest in property?
Buying a property is the biggest financial decision and even the most important one. Questions like “ Am I ready for the investment??, Is this the right time to invest?” arises in the mind of investors. So if you are wondering whether you are ready to take the plunge , here are some signs you might want to look out for.
Financial health check-up – The most important criteria to even think of buying a house is to have good financial health. It is important to maintain a healthy debt-to-income ratio.
Down payment and Savings – If you are planning to buy a house of your dreams, the foremost thing you should determine is whether you have a good savings. Because you will need around 10 % of the value of the house as down payment. So if you are having a good saving you are a step ready for the investment.
Are you buying to sell – It is often said real estate is a good investment vehicle – one that gives handsome profits. So be sure about your decision whether you are buying a house to live in or as an instrument for investment.
Employment condition – Whether you are salaried or runs a business you should be in a good position for investment.
Extra expenses – Always be ready for the extra expenses associated with buying a house. These may include stamp duty, payment for parking, society registration charges among others.
Market condition – Lastly, have a look at the market condition, especially if you are buying a house as an instrument of investment. As The real estate market is very fickle and is often the first one to be impacted in the case of an economic downturn. So talking to an expert or analyzing the prevailing real estate market conditions is always a good idea.
How to save for a house deposit?
Saving up for a house deposit can be an extremely daunting task. However, these are a few steps you can take to make the process manageable and turn your dream to own a house into reality.
- Look for ways which can help you to increase your income. Avoid spending on non-essential items and impulse purchases of liabilities. Take advantage of sales and rebates.
- Pay off your credit cards and any personal loans and focus on increasing credit score.
- Make your savings automatic on daily basis by setting up regular deposits from your paycheck into a high yield savings account.
- Record and analyze your expenditure over a month to reveal opportunities for savings.
5 Common myths about buying your first property?
Buying the first property feels scary and sometimes terrifying. It’s because you’ve probably been encountered with ‘horror stories’ from friends about how long the process takes, and how difficult it is to find the right place. We have illustrated some of the common myths about buying your first property:
1. A 30-year mortgage is the best option.
If you think that the longer you agree to invest in your home, the cheaper the mortgage payments will be, then you need to think again. The long tenure of home loans is considered just to cut down the monthly installment. Increase in tenure always results in paying more interest.
2. You can’t buy a home without a perfect credit.
A good credit score can potentially make it easier to get you a loan. However, apart from this, other factors are considered too, like including your credit history with the lender and your amount of debt and savings.
3. You don’t need an agent
You can find information about available homes on a number of websites, but real estate agents have access to properties that aren’t listed, as well as have experience in negotiating, which can be particularly helpful to you while buying your first dream home.
4. The only up-front cost is down payment.
Not exactly. Closing costs can be another 2-5% of your home’s purchase price. Other potentially additional costs include purchasing home insurance policies, hiring an attorney to review the associated contracts, paying for utilities, property taxes, maintenance and repairs.
5. Mortgage sales always represent a bargain
The price of a property is determined by market forces rather than the person who is selling. A strong market with high buyer interest can raise the price closer to the median.
I want to get into property investing but I don’t know where to start / who should I speak to?
When it comes to investing in property, there’s no shortcut. Before taking your first step into investing, the best thing is to spend time expanding your knowledge regarding the purchase and sell properties. Try to understand the complete
property investment cycle. Learn as much as you can about the different types of real estate investment schemes and the type of market you are interested in. Always have a plan, time-frame and most importantly an exit strategy. It’s helpful if you can find an investor who is doing what you want to do and learn from them. Find deals which contribute to the administrative tasks which they wish to outsource. Don’t worry about the money. It will come as long as you put time and proper dedication into learning and gaining experience.
What is the business loan process?
Just like any other loan request, the process of getting a business loan can be achieved by implementing the following simple steps :
Step 1: The foremost objective is to be crystal clear on why you want to borrow as it is the first step to choosing the right loan. Also, it’s one of the first questions you’ll be asked by a lender. Good reasons include long-term investment plan like property investment. Bad reasons include financing ongoing losses, office build-outs, or acquiring non-essential business assets.
Step 2: Get in touch with the MFAA (Mortgage & Finance Association of Australia) credited finance broker, as discussion with a credit expert, can help the borrowers to quickly identify the eligibility criteria for business loans, lease. The finance broker can even recommend lender based on funding scenario and help the borrowers to obtain funding estimate quickly.
Step 3: Preparing your business documents is an essential step that could help the lender make a decision sooner and apply for a loan once the documents are ready. The lease application documents include business profiles like the type of business, company annual sales, no. of employees and the statement regarding profit and loss.
Step 4: Now you will have to wait for the lender to access the documents, who will now verify how authentic the documents are and review the applicant credit file, background as well as financial history of the business.
Step 5: After the loan has been approved, both borrowers and lenders will sign all required paperwork. Loan approval time varies depending on the lender. It can be completed within a matter of days or several months depending on the complexity of transactions.
How can a mortgage broker help me?
When shopping for a mortgage, many home buyers enlist the services of a mortgage broker to find them the best terms and rates. A mortgage broker acts as a middleman between you and potential lenders who best fits your needs with the lowest rates. Mortgage brokers have regular contact with a wide variety of lenders. Because of this, mortgage brokers have access to rates that may not always be advertised widely and can be significantly lower than those advertised by banks and credit unions. A broker also can steer you away from certain lenders with onerous payment terms buried in their mortgage
contracts. You’ll also save time by using a mortgage broker. It can take hours to apply for different loans. A mortgage broker can save you the hassle of managing all those daunting details.
What is the difference between a mortgage broker,financial advisor, property advisor, buyer’s agent?
A mortgage broker is an intermediary who brings mortgage borrowers and mortgage lenders together but does not use his own funds to originate mortgages.
A financial advisor is a professional who suggests and renders financial services to clients based on their financial situation. Purchasing property is a significant investment. It’s important to be as prepared and informed as possible. Unlike financial planners and accountants, property advisors acquire knowledge, experience, and understanding of the property market, and may be able to provide you with relevant advice on any potential target.
A buyer’s agent represents only the buyer of a property in a real estate transaction. This type of agent agrees to exclusively represent the best interest of the buyer, usually under a formal contract.