Ten questions to ask when buying a property
Published by MFAA
You’ve saved your deposit and you’re ready to start looking at properties, but have you considered all the details? Here are 10 questions to ask.
How do I choose the right finance broker?
Look for a finance broker who’s a member of the Mortgage & Finance Association of Australia (MFAA).
MFAA members must hold diploma standard qualifications and maintain continuing professional development. Plus, should anything go awry, your complaints may be investigated by the MFAA’s Tribunal.
How many properties should I look at before buying?
A good rule of thumb is to inspect at least 15 properties to get a feel for the market, and also check reports on sale prices.
How much deposit do I need?
The larger your deposit, the better. Depending on the lender, you'll require at least five to 10% deposit, and sometimes 20%.
What if I’ve just found the perfect property, but haven’t finished saving the deposit?
You may be able to apply for a deposit guarantee (for up to 48 months). This is a second loan that covers the deposit.
Am I eligible for any grants?
Ask your finance broker if you are eligible for any first homebuyer grants. The answer will depend on the value of the property, whether you are purchasing it with help from your parents, whether and how long you intend to live in the property, whether it is the first property you have purchased and more.
Do I have to pay stamp duty?
In most cases, yes, and there are two kinds. There’s stamp duty on the mortgage itself and on the property. You may be eligible for a rebate on the second type, so ask your finance broker.
What other costs should I allow for?
You need to have the property inspected for structural problems and pests before purchase and you'll also need a solicitor or a conveyancer.
Then there is the cost of actually moving out of one property and into another – allow for removalists, cleaning and any new furniture and fixtures the new property requires.
Can I negotiate the fees of a solicitor or conveyancer?
Of course, and just as you will when choosing the right finance broker, you may want to shop around, meeting with two or more such providers.
Do I need lenders mortgage insurance?
Most lenders will require you to pay mortgage insurance if you are borrowing more than 80% of the property’s value.
What other insurance will I need?
Check with your adviser as to when you become liable for building insurance. You may also want to think about income protection insurance in case you become ill and can’t work.