You’ve finally found the home you’d like to buy. Now the big question is, how much should you offer? Before you can answer that there are four things you need to be clear about.
How much can you afford to borrow?
We can calculate how much you can afford to borrow based on your earnings and lifestyle, and will work with multiple lenders to find the loan that’s right for you. They can also help you get a pre-approved loan, which means you can act quickly when you find a property you want to pursue.
How much is the property worth?
There are a number of ways to find out what the property is roughly worth. Get friendly with a couple of local real estate agents, talk to people who live in the area or who have been trying to buy there, and go to some local auctions to get a feel for the market. The local council website is also a great way to find out more about the area and the property.
How much are you willing to pay to make sure YOU own this home?
How much you’re prepared to pay for the property might not be the same as what you think it’s ‘worth’. For example, you might put a higher value on a property because of its school zones or proximity to work, local transport, or family. You might see potential in the house, but know that you’ll need to allow money for renovations to make it work for you. Whatever the case, make sure you have a realistic figure in mind.
Can you afford to stretch yourself a little bit further?
The difference between owning the property of your dreams and seeing someone else own it could come down to as little as $5 a week. Being prepared to pay that little extra could make all the difference if you find yourself in a competitive situation, or if you’re buying a property that will require some renovating, to make it work for you.
The question is, just how far?
When you’re under pressure, it’s easier to make the right decision if you know exactly what it means in terms of weekly repayments. And you need to ensure you have the cash or pre-approved amount to be able to bid to that amount.
For a Quick Guide on repayments for bidding:
|Loan size||Monthly repayment||Cost over 25 years|
Source: www.canstar.com.au. Based on a loan taken over 25 years excluding fees. The current interest rate is based on the average standard variable rate of 4.47% on the CANSTAR database
The Real Estate Institute of Australia, has also developed a ‘Buying at Auction’fact sheet available at www.reia.com.au.
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