Home buyer’s checklist
While you’ll never be able to plan out every single detail of buying your next home, being as prepared as you can be will make the process much easier and more enjoyable. So start by making a list – preferably in a notebook that you can later take with you to inspections so that all your hard work is in one place.
Write down all the things you want on one side of the page, and all the things you need on the other side. This will not only give you a framework of what to look for when searching for your next home, but it will also help you decide what things you can and can’t live without.
You can use the search criteria on real estate websites like www.domain.com.au to create your own personal checklist. Follow their format to create a list of the things you’re looking for, like number of bedrooms, number of bathrooms, on street parking or garage and land size.
Putting together a budget and saving for a deposit
Unlike buying your first home, putting together a budget and deposit for your next property isn’t limited to saving a lump cash sum. There are a number of other options you may wish to consider, like unlocking the equity in your home.
When you’re putting together your budget, don’t forget to consider things like your savings, the equity you may have built up in your home or any additional lump sum repayments that you have made. While they aren’t represented as physical cash, they all create greater value and borrowing power when it comes to making your next purchase.
What is equity?
Equity is the difference between the market value and the unpaid mortgage balance on your home. For example, if your home is valued at $350,000, and you still have $100,000 left to pay on your mortgage, you have $250,000 in equity.
As time goes on and you continue to reduce the balance of your loan, or the market value of your home increases, your equity grows. You can then use this equity to do things like build wealth through property investment or purchase your next home.
Unlocking your equity
Unlocking the equity in your home can open up a whole new range of opportunities. From investing in rental properties, to purchasing your next home, to buying a new car or paying for renovations, the way you use your equity is really up to you. Put simply, the equity in your home gives you the power to act on your investment strategies without necessarily having to save up a large cash deposit.
Of course, everyone’s circumstances are different, and we highly recommend speaking to your local lending expert or financial advisor before you make any decisions.
Can I access my equity if I’m still paying off my home?
Depending on the amount of equity you have in your home, you may be able to access funds and start investing sooner than you think. Remember, equity isn’t just increased by paying off your home loan. If the value of your home has increased since you first bought it, the amount of equity you have is likely to have grown too. MyState’s Line of Credit facility gives you instant access to the equity in your home when you need it.
The best advice for planning a successful budget is to make it realistic, then stick to it. Once you have determined your savings goal (taking into consideration your equity and extra repayments, don’t forget!) you can then work out your ideal timeline, and how much you need to put away every week or month to reach your goal.
Use our budget calculator to map out your regular financial commitments, like bills and loan repayments, so you can see how much money you have to play with. Remember, even if you can only afford to put a small amount of your pay away each month, if you make it regular it will add up quickly!
Calculating the cost of buying and selling
There are a number of factors to consider when calculating the cost of buying or selling your home. These include things like capital gains tax, stamp duty, real estate agent fees and conveyancing fees, so it’s important to include a little extra when putting together your budget. These fees often vary depending on where you buy and who you use, but as a starting point you can use our stamp duty calculator to estimate the government fees that may apply to your home.
When it comes to putting together a deposit, you’re required to have a minimum of 5% of the total security value of the property you are purchasing. For example if the property being purchased is valued at $300,000 then $15,000 would be needed as deposit. This could be made up of either genuine savings that have been built up over time, or non-genuine savings such as funds obtained from the sale of an asset that is no longer needed, a gift from a family member, a deceased estate or termination payout. If you are saving for a deposit you might find it beneficial to set up a regular savings plan to achieve your goal. There is also a Savings Plan calculator that you might find useful.
Other things to consider
Why are you moving? It may seem silly, but the answer to this question will inform every decision you make when it comes to purchasing your next home. Is it time to upsize? Downsize? Do you not like the area? Do you want to be closer to schools or shops? It can be easy to lose sight of this when you get stuck into the home buying process, so every time you’re feeling overwhelmed with choices, just remember why you’re doing it all in the first place.
Finding your next home
As you look for your next home, your biggest resource is actually the home you’re living in now. What do you love about it? What don’t you like? What do you wish you could change? As you answer these questions, you’ll develop a very clear idea of the kind of home you’re looking for.
If you have decided to move areas and live in a new suburb, do as much research as you can before you make a decision. You can access suburb reports and profiles on www.realestate.com.au and www.domain.com.au.
It’s also worth thinking about public transport, schools, corner store, supermarket, hospitals and other points of interest you may wish to be close to. Most property search websites, including those above, include these things in their search criteria to make it easier for you to find what you’re looking for.
Moving with bridging finance
Bridging finance allows you to borrow the deposit for your next home before you’ve sold or received settlement on your current one. This gives you the confidence and freedom to make an offer as soon as you see the home you love, without having to worry about selling first.
Once you do finalise the sale of your home, you can then use the proceeds to repay your bridging finance.
Home Loan Health Check
Because your needs and financial circumstances are always changing, moving home is the perfect opportunity to assess the suitability of your current home loan. You may choose to take it with you to your new property, or to change it to a home loan that suits you and your life stage a little better. Make an appointment with your local lending expert to discuss your options today.
Something to consider when buying your next home is how you’re going to protect it. We have a range of insurance products to help you get the cover you need, from Home and Contents Insurance, to Landlord Insurance, to Loan Protection Insurance, which helps protect your loan repayments in the event of illness or injury. It’s important to remember to budget for these essential extras. View our insurance products.
Shifting with a portable loan
When you move home, it helps to be able to take your existing home loan with you. MyState’s flexible home loan products have a range of features and competitive home loan interest rates to help make upgrading to your next home easy. Make an appointment with your local lending expert to discuss portable loans today.
Finding features that suit you
Every home loan is different, and there are a range of features and benefits to consider before you decide on the right one. Our local lending experts can provide you with the best home loan advice and can help tailor a home loan product to suit you. Here are a just a few of the features that will help you determine which loan is right for you.
Home loan repayments
Look for a loan that gives you flexibility with your repayments. Most loans let you choose between weekly, fortnightly and monthly repayments, giving you the freedom to pay off your loan in a way that suits you.
Some loans charge you an additional fee for making extra repayments. If you think you will be able to make extra lump sum contributions to your loan every once in a while, look for a loan that lets you do this for free so you can get ahead faster and don’t forget, making repayments more frequently e.g. fortnightly or weekly can help you pay off your loan sooner.
When it comes to managing your home loan, you want to pay as little in fees as possible. As well as being able to make additional repayments fee free, look out for things like establishment fees, account keeping fees and early payout fees. You want the freedom and flexibility to pay off your mortgage as you choose (while meeting your monthly minimums of course), so it’s important to look for loans that won’t charge you for getting ahead on your mortgage.
An offset account is an everyday savings or transaction account that is linked to your home loan account. The money in your offset account is used to offset the amount of your loan, helping you to reduce the life and cost of your loan, without tying up all your funds. For example, if you have a loan amount of $250,000 and an additional $15,000 in your offset account, you’re only charged interest on $235,000 of your loan amount.
With a home loan redraw facility, you can access any additional funds you’ve deposited into your home loan account. This means any lump sum repayments you make on top of your regular monthly repayments are not only helping you pay off your home loan sooner, but can also make budgeting easier when life’s little extras, like Christmas presents or renovations, pop up.
Getting more flexibility with a Line of Credit
MyState’s Line of Credit facility is an effective way to instantly access the equity in your home whenever you need to. It also provides great flexibility by offering access via ATMs, EFTPOS, Internet Banking, Phone Banking and cheques together with direct entry facilities. This gives you the freedom to use the value you’ve already created to purchase your next home, rather than having to start from scratch with a large cash deposit.
Getting more help
The best way to find a home loan that suits you is by talking to one of our friendly local lending experts. They’ve got all the expert advice and information you need to find the loan that’s right for you. Make an appointment today or call us on 1300 092 468.
Applying for pre-approval
Having a pre-approved ‘yes’ from MyState gives you the ability to say ‘yes’ too. Pre-approval allows you to make an offer quicker, with the confidence of knowing exactly how much you can afford to spend. To find out more about home loan pre-approval make an appointment online with your local lending expert today.
The application process
Applying for a home loan with MyState is easy, and we’ll keep you up to date with what’s happening every step of the way. Check out our step-by-step guide to the application process below.
Stage 1: Application
Download our home loan checklist to help you get your documents ready, then drop into your nearest branch or call 1300 092 468 to begin the application process. We’ll process your loan application on the spot, subject to an employment check, valuation & lender’s mortgage insurance. You’ll have a decision on your home loan within 60 minutes, guaranteed.
Stage 2: Verification
We’ll check your documents, including your employment history, to verify that they’re all correct.
Stage 3: Valuation
We’ll order a valuation to verify the value of your preferred property. The valuer will get in touch with the real estate agent directly and arrange the valuation; then report back to us.
Stage 4: Lender’s Mortgage Insurance
If it’s required, we’ll apply for Lender’s Mortgage Insurance. If you have a sizeable deposit, you may not need it. We’ll let you know either way.
Stage 5: Unconditional approval
At this stage, once your details have all been verified, the valuation is satisfactory and mortgage insurance (if required) approved, we’ll unconditionally approve your loan, which is a 100% guarantee that we’ll be financing your home loan.
Stage 6: Funding
At this stage, your loan will be opened, and the arrangements to book settlement will be made with your conveyancer and settlement will take place at an agreed time.
Popular loans with people buying their next home
MyState’s flexible home loan products have a range of features and competitive home loan interest rates to help make upgrading to your next home easy. We offer a range of home loan options for buyers looking for their next home, including: