4 tips for buying your next home
YOU’VE OUTGROWN YOUR CURRENT HOME, AND ARE LOOKING FOR SOMEWHERE NEW. BUT WHERE DO YOU EVEN START? AND WHAT DO YOU DO WITH YOUR OLD HOME? THAT’S WHERE A MORTGAGE BROKER COMES IN.
For Sydney couple David and Sabeena, who recently upgraded to a new home with more space to entertain and eventually foster children and dogs, their broker proved invaluable.
Reema Katrib from Aussie was with David and Sabeena throughout their upgrading journey and helped make the process as easy as possible.
“This is a big life moment moving on from a first home and upgrading to the ‘dream home’,” Reema says.
“There are lots of elements to consider when upgrading because you are not just buying, but selling too. Not only is it a considerable financial commitment, but for most people it can be confusing to know where to start.”
These are Reema’s four top tips for those looking to upgrade.
1. RESEARCH
“Ask questions. Always. About everything,” Reema says.
Know the market you are buying and selling in, and how it could help or hinder your goals.
David and Sabeena closely watched market conditions and took advantage when they saw opportunity.
“We noticed interest rates were coming down, there was limited stock available – so felt it was a good time to list our house for sale and take advantage of this time to upgrade,” David says.
2. FIND A BROKER YOU CAN TRUST
Find a broker you trust and one who will get you across the line.
“Reema became like a part of our family and we became part of her family – she was always contactable, and we couldn’t have achieved what we did without her,” Sabeena says.
Reema says: “If you don’t have that trust, you might end up going straight to a lender, and then you could just become another number.”
She says there can be a big difference when working with a broker as opposed to going straight to a lender.
“With a broker you deal with the same person throughout the process. When you deal directly with a lender you can walk in and you speak to someone and then come back next week, and that person is gone. It can cause confusion.
“When I start working with my clients, I’m with them from the beginning to end. I’m consistently that one person whom they can go to.”
Having someone who is there from the beginning and understands your situation can be beneficial with the twists and turns of buying and selling property.
3. SET A FINANCIAL LIMIT
Reema always asks clients: “Have you thought about a loan amount?” “It might seem surprising, but in my experience, a lot of people have not even thought about their loan amount or what their repayments might be, especially if rates rise. Once they have this information, it allows them to then understand and make an informed decision,” she says.
“You’ve got to work out what’s comfortable. This is a long-term loan. This could be the next 25-30 years of your life. How much debt can you manage long term?”
You should also consider future lifestyle changes which could impact your financial capacity, such as taking time out of the workforce to raise a family.
From her perspective, the answer to this question gives her the information she needs to help her customers determine their borrowing power.
4. BE REALISTIC
Finally, be realistic and prepared for things sometimes not going the way you thought they would. “You’ve got to be able to be agile. It’s OK to have Plan A, B and C – as long as you reach your goal it doesn’t matter how you get there,” Reema says.
For David and Sabeena, bridging finance was part of their Plan B.
Sabeena said: “We had to contemplate bridging finance because there were some setbacks with the sale of our original house, and we were about to settle on our new home.
“We just had to go with it and be realistic about our position, luckily the timing all worked out and we didn’t need it, but we knew we had options.” For more information about how a mortgage broker can help with your upgrading plans go to aussie.com.au