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It may have been eons since you were a fresh-faced first-time home buyer, but now the years have passed and you are looking to secure your second home. You may need to brush up on your property buying skills in this ever-changing property landscape to secure a sweet deal for yourself. Here are five things to consider.
1. Checking your home's equity
What can give you more leverage into buying your next place than using your home equity? This is the opportune time to re-evaluate how much equity you have built up in your current home which can make purchasing a new home easier. Home equity is basically the value your home has accumulated over the years. The more of your mortgage you have paid off the more equity your current house will have in place. Not sure how to calculate how much equity you have built up? You could consider using the services of an evaluator who will give you an accurate figure.
2. Doing a market research
When you are trying to nail the process of getting the best value for your home, you will have to put in the market research. It is important that you assess the current area you are in and look for buildings that are similar to your own to get an estimate of what your house could sell for. Although property prices have slumped by 6.1% in capital cities such as Sydney, this does not mean that the property market that you are in has experienced the same effect.
3. Compare the housing growth for your area
Brushing up on your property skills also means knowing how the property in your area has been doing in terms of home values. For example, property values have increased in areas such as Brisbane by 0.31% while Hobart has experienced a booming growth in property values which rose by 9.67%. This can be good news if you own property in such areas, but this could be watered down by costs such as stamp duty that you will have to pay on your new property. You will also have to consider the ongoing costs that come with your new house that could impact your budget.
4. Your credit report matters now than ever
Purchasing a new home means that you could be taking out a new home loan, which also means that your credit report will be under scrutiny. Therefore, before you apply for a home loan it is important that you check your lender's requirement along with your credit score to see if you are eligible to be approved. Remember to check your credit report which is a file that contains the history of all your loans and debt that you have. It will also prove your credit worthiness as to whether you were able to pay them off. Check for any errors or arrears that are on your file that could potentially cause your application from becoming rejected.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
