when you find a property you’re interested in purchasing, you must remember a few key points
If you’re purchasing a home at an auction, remember that the dealings are final and there can be no negotiation of contractual terms or contingencies such as arranging finance or a pre-purchase building inspections if your bid is successful, so be sure to ensure you have satisfied all your requirements for an auctioned property before you bid; finally, do remember that being pre-qualified for finance is very different to being pre-approved for your home loan.
• It is in your best interests to arrange for an independent property inspection. If you’re looking at homes in a termite prone area (you can find this out from the local council), ensure you also have a timber pest inspection contingency in your contract before you commit to purchase a property.
• • Save time by getting pre-approved for your finance before you begin hunting for a property. While 100% mortgages, are possible, a deposit of 5-10% of the property value is expected. Consider how you would like to structure your mortgage (see ANNEX E) and exactly what type of financial product you are seeking to finance your property purchase. Think about fixed interest, variable interest or a combination of the two, as well as the terms of the mortgage you are looking for. How will your loan repayments impact on your lifestyle?
• You need to formally apply to a financial institution to get pre-approved for your finance. Generally, the more information you provide to them at the beginning – such as proof of income (Tax Assessment Notices), asset and expenditure figures – the quicker your finance can be approved.
Financial institutions will approve your finance in writing, and pre-approval normally lasts for three months. Written pre-approval from your lender helps make your offer attractive to the seller, and has been known to be the key to a winning offer.
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