Buying a Home tips? Home Loans for Dummies? Grants, things to look for? Any recommendations?

neil on 11/06/2010 - 23:49

Well, I'm at the point in my life where I'm going to buy an expensive shoebox in Melbourne.

Lots of questions…
What should I look for in a home loan?
What's the process for the first home grant?
How much do you get (in VIC)?
Are inspections worth it?

My friend who is also in the process of buying thinks its worth it if the property looks like it has problems or is old. The same friend reckons to get a lawyer to look at all paperwork (section 32s, body corporate info).

One place we looked at was an apartment building that hasn't been built but has been selling like hotcakes. They mentioned that to get the place, we would need either a 10% deposit or a bank guarantee. Any things to watch out for?

General Discussion

Comments

  • samfisher5986 on 11/06/2010 - 23:58

    Make sure you take into account the worst case scenario. For example if you lose your job, break up with a partner etc.

    You should also make sure you calculate the expenses properly, many people don't take into account all the extra expenses with buying a place, and also don't account for rising interest rates.

    Its also not worth sacrificing your standard of living for 20-40 years just to have a house, so make sure you only buy what you can afford.

  • [Deactivated] on 12/06/2010 - 12:00

    Whenever you "settle" on a place, before you sign the contract (or within the back out time) go sit outside the house on a friday or saturday night, great way to understand what your future neighbourhood will be like.

    And the old adages of north facing and on high side of the street makes a difference in resale

  • inherentchoice on 12/06/2010 - 15:34
    +2

    Well someone I know who's bought many houses in their time and spent countless hours with real estate agents, once suggested to me to tell a rival agent about the property you're looking at, and they will be quick to point out all the cons and anything wrong with it because it might steer you toward one that they're selling.

    So maybe you can mention to the company selling a rival apartment block that you're looking at this other one and I'm sure they'll share their frank thoughts about the one that's "selling like hotcakes".

  • kcyw on 12/06/2010 - 21:40

    Maybe try home loan "brokers" for home loans. I heard it's a lot easier because they searched for you and if you are not happy with the rates and terms, just say no and they will look again. And because you are borrowing instead of investing, it doesn't matter if the bank is small and unheard of.

  • dragonrabit on 13/06/2010 - 01:05

    for the loan, i suggest u take the loan with the bank, they got better source of funding, for non bank lender, they got their source of funding from rmbs. and when the money market was not stable, they are the first get hit with higher cost of funding and they passed this higher cost faster. as their cost of funding from short term funding, in case if u are default with your repayment, this company will repossessed your property faster than the big boys.

    if u look for the loan try speak with your broker, bargain with them for no application fee and no monthly fee (most of the time u can bargain when ur loan above $300k). try split ur home loan, some portion is fixed loan and some is variable rate. when the interest rate start rising, it is good start to lock some of your home loan. remember, most of fixed loan, they only allow u to put extra $10k / annum. shopping around is the key, and try to negotiate. i can not mentioned certain product is better, coz at the end is your skill when u negotiate with your lender, and how desperate ur lender to achieve their monthly target.

    for first home buyer grant, you can ask your lender to help u to claim this money from the gov, you can ask your lender to claim on behalf of you or you can ask your solicitor to claim on behalf of you. normally the money credit to your account within 1-3 months, worst case scenario can take up to 1 year.
    how much u can get? http://www.sro.vic.gov.au/sro/SROnav.nsf/alltitle/First%20Ho…

    inspection? YES, it is a must. would u buy a car without test drive? without inspection?
    if u buy house/ unit, check the wall, if there are some crack on the wall, try to put your finger in between the crack, if fit, prefer not make any offer. most likely got some issue with foundation of that property, it might cost u fortune to fix the foundation.

    before make any offer, please ask your agent the contract and bring to your solicitor for explanation.

    1. find the loan.
    2. find the solicitor.
    3. before mare an offer, ask the contract first without put some deposit.
    4. go to your solicitor for explanation, and may be u need to do building inspection, etc.
    5. all good, go back to ur agent, make an offer and put some deposit as required.
    6. when the vendor, agree then u ready to exchange the contract and inform ur lender asap and ur solicitor as well.

    GOOD LUCK

    • neil on 13/06/2010 - 21:52

      Thanks dragon, lots of good information there.

      How do you find a good broker? Is it sort of a word of mouth thing?

      Regarding inspections, it just seems like it's going to cost a lot of money if the avg person looks at a bunch of properties. As we will be buying an apartment rather than a house, it seems like a less necessary than for a house inspection/termite check.

      In any case, I think we are erring on buying into a new development, thus not needing to get a loan until built and giving us a chance to better our deposit and raid our family of money ;)

      • dragonrabit on 14/06/2010 - 00:22

        you only do building inspection when u are ready make an offer. old building is a must to check, coz we don't know what is going on with that building.

        if u plan to buy off the plan, i guess the vendor normally ask you to provide bank guarantee. to get bank guarantee, normally u need to apply for a home loan.

        broker, you might have to get good referral from someone that has use their service before. but in my experience in the past dealing with the client that using broker, most of them are not happy.

        what is the broker job? their main job should be give the customer the best products, cheaper home loan that suit the customer needs.
        every bank has many type of products, if one broker claim they are handling most of the lender. i bet you this broker doesn't know every products that he/she selling.
        this is based on my own experience, i was handling 6 type of loans, and every products has different features. imagine if you are handling 10 or 20 or more lender, multiple number of products they have and the products feature.
        most of the customer that dealing with the broker, when they got a question, the broker will ask you call to the lender hotline directly. thats why most of the time, there are miscommunication, what the broker promise and what the customer got it from their lender. just be-careful when u dealing with doggy broker like this. coz normally this type of broker only chasing commission only. they can make up ur income so the bank approve ur loan, but at the end u are the only will get trouble if you take too much loan.

        again good luck mate.

  • mastablasta on 14/06/2010 - 10:35

    You may want to get yourself to the Home Buyer and Property Investor show - seeing as you're in Melbourne, here's the site: http://www.homebuyershow.com.au/melbourne/

    • neil on 16/06/2010 - 13:43

      Thanks masta, may check that out, just need to find discount tix ;)

      • mastablasta on 17/06/2010 - 00:05

        Subscribe to Domain.com.au if you haven't already - they have giveaways for the Brisbane show, so I'm sure they'd do the same for the Melbourne one.

        EDIT: Well looks like it's already been posted on OzB…

  • kati on 16/06/2010 - 12:29
    +1

    Good on you for wanting to get into the market. Buying my home was the best thing I ever did :) But ozbargain isn't really a dedicated property forum though, maybe head on over to Somersoft property forums and have a look. Heaps of people there will be able to answer your questions in more detail.

    Mods, I'm not associated with the SS forums in any way (but I just post a lot on it, property investing is my passion!)

    • scotty on 16/06/2010 - 16:01

      Yes I know about SS forum but isn't it more for investors than home buyers? But then I have no idea what neil is intended to buy :P

      • kati on 16/06/2010 - 17:58

        True, but I first went onto SS as a complete newbie, completely overwhelmed about buying my 1st house, and I had so much help from the people on there.

        Ozbargain's a pretty good forum too :)

        • neil on 16/06/2010 - 21:17

          So umm… what't the SS forums? (I Googled it found Ute modding forum) Do you have a URL?

          • scotty on 16/06/2010 - 21:24
            +1

            @neil: Sorry it's Somersoft mentioned by kati.

            http://www.somersoft.com/forums/

            Was looking into IP-related stuff quite a while ago, but too lazy to actually do something at the end :P

            • muzzamo on 21/06/2010 - 12:05

              @scotty: Somersoft is obviously very one sided when it comes to investing in property though.

              Be careful there because there are plenty who are ignoring the obvious risks regarding residential property in Australia at the moment..

  • AntMan76 on 16/06/2010 - 12:36

    Don't buy the best house in the worst street/suburb.

  • mick123 on 16/06/2010 - 13:18

    You say you're in Vic, so I'm guessing Melbourne.
    I am in Sydney but I will give my point of view.

    In Melb, you have a lot more auctions than we do here.
    1. Don't know about Melbourne, but the "price guide" given by agents here are PATHETIC!! And i'm not just talking about them not knowing what someone else is willing to pay for the house (obviously that is hard to determine) but I mean in reserve prices. I have been given a price guide of "$500+" for a house, which was PASSED IN at $601k, which means his reserve was higher than $601k. Why tell me $500+ than. Another time, guide of low 500s, reserve of $560 (bidding only went to 505k). And I can give you several other examples, and that is just from my own personal experience.

    This leads on to.

    1. Inspections. Private sales/negotiated sales etc - inspections are fairly easy. You put small deposit to "reserve" the house, and you have 5 or 7 days cooling off period to do your inspection and other things. You only need to do 1 inspection, and its only after you have reserved the house at a set price.
      With auctions, fall of hammer = sale. No cooling off period to do inspection after, so you have to do it before, and this is for a house that you do not know if you will be the highest bidder. And the agent gives you false reserves/guides (as explained above) so you do the inspection thinking it is in your price range etc and you don't meet reserve or someone bids higher. If that happens at 4 auctions you are serious about, there's $2k gone before you even find the house.
      In ACT, I believe the seller does the inspection and potential buyers can get copies. That is a fairer system.

    Anyway, this is more of a rant than advice.
    I think the whole real estate industry is very shady.

    • neil on 16/06/2010 - 13:43

      Yeah, that was my worry with inspections. Almost every property I've seen so far is both underquoted (based on sales nearby) and is Auction. It's just hard to justify all those inspections. I also heard that even if you do get an inspection, they don't find anything wrong, and later on down the road there is a problem, there is not much you can do.

      Any issues with buying an apartment off the plan? I was thinking this may be the way to go for us anyway.

      • mick123 on 16/06/2010 - 14:54
        +1

        you mentioned above you are looking for homebuyer tix. get them free here

        http://www.ozbargain.com.au/node/26646

        http://www.homebuyershow.com.au/tickets/

        use the code on the ozbargain page

        "Any issues with buying an apartment off the plan? I was thinking this may be the way to go for us anyway."
        Can't help you much with advice there as I haven't looked into apartments. The ones with good public transport or inner city would probably have best resale value, but they are expensive. You can buy houses off the plan, with same deal (ie. 5 or 10% deposit). Depends if you think you'll outgrow the apartment quickly.

        "I also heard that even if you do get an inspection, they don’t find anything wrong, and later on down the road there is a problem, there is not much you can do."

        They protect themselves very well. Their reports are quiet detailed but they make sure to make notes on the reports everywhere about their liability (ie. none).

        Sorry, I do not know much about Melbourne area

        • neil on 16/06/2010 - 21:25

          Thanks mick, woo hoo free tickets.

          Will be in an apartment for at least 5 years. Don't plan on additional family members so looking for 2 bedroom apartment with balcony or preferably courtyard. Somewhere in the nearby suburbs of Melbourne, e.g. North Melbourne, Brunswick, Travencore, Fitzroy North, Parkville. Will need to check out Flemington and Kensington as there seems to be some good 2 bedroom apts there.

          • dragonrabit on 16/06/2010 - 22:01

            @neil: how about point cook mate? last time, i went there, those area growing so fast. the land value increase faster than unit.

  • dragonrabit on 16/06/2010 - 16:55

    i like buying property when the interest rate high, or when the interest rate strat dropping.
    when the interest rate high, that time many vendor desprate to sell their property. you can bargain the price, minimum 5%, lucky u might get 10%+ off from the asking price.

    when the interest rate start dropping, some buyer still thinking this is temporary only, they are thinking later the rate will be drop more. they try to catch the bottom of the ocean. these typical buyer will be missed of the boat.

Login or Join to leave a comment
Login Join