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Organising finance
There are many home loan products on the market today, each with different features and terms. To make sense of it all, do your research and talk to the experts. MyState Financial’s experienced home loan experts will work with you to explore each of the home loan options available to ensure you find the best product and home loan repayments to suit your needs. We recommend that you discuss your borrowing capacity with your credit provider prior to signing a purchase contract. Make an appointment with a MyState Financial expert today.
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Signing a purchase contract and payment of a purchase deposit
Once you have signed a contract on a property, you may be required to pay a deposit to the vendor’s solicitor or real estate agent which will be held in trust until the day of settlement. This amount may vary depending on your individual contract.
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Do you need Lenders Mortgage Insurance (LMI)?
Traditionally, other credit providers may only lend up to 80% of the total home loan amount, or maybe even less if you are borrowing for a rural property. However, LMI may allow you to borrow more for your purchase as it works by protecting your credit provider against any risk associated with your property should you default on your loan. The premium you will need to pay for LMI depends on the purchase price of the property and how much you are borrowing – this insurance is paid by you at the time of settlement. (MyState Financial’s Home Loans may allow you to borrow up to 97% of the property value*).
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Stamp Duty
Apart from the home loan itself, there can be a number of fees associated with buying a property. The biggest of these is most likely to be ‘stamp duty’. Stamp duty is a tax payable to the State Government and is based on the purchase price of the property. The amount of stamp duty applicable can vary between states and territories and some first home buyers may be entitled to stamp duty concession so be sure to talk to your solicitor.
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Conveyancing
This process involves the legal transfer of the property to the buyer from the seller and is a necessary, additional cost of purchasing a home. It is important to consult a Solicitor or a licensed home loan conveyancer when purchasing a property as there are a number of checks and legal obligations that need to be considered in this process.
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Settlement
This refers to the date that the purchaser pays the balance of the property purchase price to the vendor. The settlement period is often negotiated as part of the contract of sale. You will need to ensure you have allowed adequate time for all associated applications and paperwork to be processed and inspections and enquiries to be completed – generally settlements may be completed at either 30, 60 or 90 days – however this may be negotiated at the time of signing your contract. It is possible to request to move in to the property prior to the settlement date – known as ‘early possession under licence’ which usually requires the payment of rent until the settlement date.
*Subject to conditions and Lenders Mortgage Insurance approval.
This list is not exhaustive, and as such is not a replacement for specific advice from qualified lenders, financial planners, accountants, solicitors and building consultants.