“Owing a home is a keystone of wealth –
both financial affluence and emotional security”
Planning to buy property – important issues
Buying a family home continues to be a great Australian dream, but before you make any decision, there are many issues you need to consider.
Important issues to consider:
- Is home ownership actually right for you?
- Work out what you can afford and what deposit is required?
- Don’t forget to include all additional buying costs within your budget.
- Understand different types of loans available on the market.
- Choose the right lender – bank directly or a broker?
- If buying a property with another person, understand different ways of ownership, benefits and potential traps.
- Look for a property after your loan has been approved so you know your limit.
- If buying at auction, never ever go over your decided purchase price limit.
- Do not fall in love with the property at the time of buying. You have lots of time to do so after you have move in. Act with your head, not with your heart.
- Inspect property before you buy.
- If looking for an established property, employ the building surveyor to check if the construction is satisfactory, if it requires any permits and ensure there is no termite infestation.
- If you are swapping properties, sell your original home first before buying a new one, or it could cost you thousands if you are unable to sell your home in time.
- If you are using one property as collateral to buy another, make sure you receive advice how to establish loans before you proceed with any transactions. If set up incorrectly, it could be detrimental to your annual tax benefit and could be costly if not impossible to be changed.
- Manage your mortgage
- Enjoy your castle.
But don’t forget, one transaction can cause other issues to arise, hence posing further questions:
- Is your mortgage the optimum option available on the market?
- Have you checked your personal insurance contract? Is your cover still sufficient?
- Do you have an appropriate Income Protection in place?
- Do you have a Will?
- Have you ever spoken to a professional about your Estate Planning needs?
I can help you to check those issues and ensure that your financial future plan provides stability and security.
Not surprisingly many young people disagree that buying a family home is the best financial decision. They believe that properties are either out of their reach or a purchase price is not justifiable, so they are quite happy to rent and save their surplus in other investment forms.
Ultimately, as long as you save the surplus in some form of investment portfolio that can increase in capital value just like the property would, that is a very legitimate way to grow your nest egg.
There are many benefits to this strategy:
- No ongoing annual property expenses
- No upkeep expenses
- Flexibility to move easily from place to place
- No mortgage – which usually means we get “stuck” in one place for a very long time.
Both strategies have their merits and will suit some but not others. This is where understanding your goals is essential. There is no right or wrong here, only whatever suits your lifestyle, your investment choice and your budget.