10 Easy Steps to Home Ownership

The following ten steps provide a brief but informative outline of the events you are likely to encounter on the road to purchasing your home. As you will see there are many things to consider and much work to be done and for that reason we thought that it may be useful to you.

Step 1. Determine You Budget
Step 2. How Much Bang For Your Buck
Step 3. Good Loan Hunting
Step 4. Shop For The Best Deal
Step 5. Get The Application Approved
Step 6. Legal Legwork
Step 7. Time To Buy
Step 8. Deposit Time
Step 9. The Waiting Game
Step 10. Settlement At Last


Step 1. Determine Your Budget
The first step towards home ownership involves a little introspection. You need to take a long, hard look at yourself and determine what you are planning in the years ahead and how much you can afford to repay.
You need to calculate how much spending money you have after all your repayments, bills and other living expenses have been met.


Step 2. How Much Bang For Your Buck
Now that you know your budget, it's time to determine how much 'home' it's likely to buy you - and the suburbs you can afford to live in. The real estate section in newspapers, local papers and real estate agents themselves are all useful sources of pricing information.

It's important to remain flexible with your housing demands because it's simply impossible for everyone to purchase their dream home immediately. Sometimes it is better to settle for something that isn't perfect, pay it off quickly and then step up to a better home down the track.


Step 3. Good Loan Hunting
Determining the type of loan that suits your needs is the best way to begin.
It's important to consider which loan features are appropriate to your lifestyle. If you'd like the security of knowing exactly how much your regular repayments are going to be for a given period, then a fixed loan may be for you. If you want to make additional repayments, then a variable rate could be more suitable. Should you have surplus disposable income, then an all-in-one loan or 100 per cent offset account might be the ticket.



Step 4. Shop for the best deal
Whether it's a lower interest rate, zero establishment fees, frequent flyer points or other value-adds, the more you know about the current home loan market, the better your negotiation skills will be when it comes to talking turkey with your lender of choice.


Step 5. Get the application approved
Having found a suitable deal, it's time to find out if your lender of choice wants you as badly as you want them! Find out exactly what hoops you are required to jump through in order to get home loan approval and ensure that you have the required documentation.


Step 6. Legal legwork
With your finances under control, it's time to find a suitable partner to perform the eventual transfer of property from one person to another, through the process of conveyancing.


Step 7. Time to buy
Having put all of the pieces together, it's finally time to buy. While the preparation up to this point may seem like over-kill, once you find the property you want, the last thing you need is to be rushing around tracking down a lender, waiting for a loan approval, negotiating with solicitors and determining whether the property is a bargain or not. You're going to have your hands full with the next three steps, so don't proceed until you've caught up.


Step 8. Deposit Time
Once your bid on the property has been accepted and you're given the green light on the contract, it's time to break out the chequebook and pay the pre-requisite ten per cent deposit. This is typically given to the real estate agent, who holds it on behalf of the vendor until the sale is finalised.


Step 9. The Waiting Game
Take a deep breath and relax, you've earned it. The pace slows a little now as you wait for your legal team to do some tyre kicking. For the next six weeks, sometimes less and sometimes more, enquiries will be made about the property. Survey and drainage will be examined, government departments will be written to, heritage orders will be inspected and council checks will be performed.

Step 10. Settlement At Last
Settlement day is the day that you (or your representative) meet with the vendor to swap your cheque with their title of ownership. Congratulations, you are now the proud owner of your new home. It's only taken you ten steps to get here, and now you are a property owning veteran. What will be next? A newer, larger, better home in five years time? Maybe this will be the first purchase in your property investment portfolio?

Regardless of your future movements, there is probably nothing more stressful than making your first purchase. Mistakes will be made and lessons will be learnt, but isn't that what life is all about?

For a more detailed version of this article, see the 10 Easy Steps to Home Ownership at www.flrsolutions.com.au