BUYING A PROPERTY IS LOOKING VERY ATTRACTIVE. RECORD RENTS, FLAT HOUSE PRICES, INTEREST RATES AT 45-YEAR LOWS MEANS MANY ARE CONTEMPLATING THEIR NEXT PURCHASE…
So, should you join the rush?
Before you consider moving forward you need to think how secure you are in your job. Unemployment is forecast to rise beyond 7% as the economic conditions bite. However, if you fell relatively secure, the next step is to determine how much you should borrow.
Remember rates are at record lows so you shouldn’t base you loan size just on today’s rate; you also need to perform a repayment stress test. Could you afford it if rates went up 1% – 2%. We have recently seen how rates can fall – at some point they will reverse.
As a rule of thumb for each percentage point increase you’ll have to find an extra $65 a month for every $100,000 you borrow.
Next, you will need to work out what your borrowings and deposit and any equity you can contribute will allow you to purchase. Remember you will need to pay stamp duty and legal costs, etc. This can run to another 5% on top.
After you establish your price range it is a matter of researching the property market, locating suitable properties, evaluating each alternative and negotiating a fair purchase price.
Provided your job is secure, you borrow an amount you can afford, don’t pay over the odds and can hold a property for at least the average property cycle.
But be sure you tick all those boxes.
If you are looking to join the stampede, but don’t have the time or skill for all the necessary steps we can help you out. We can provide an integrated service for each step. Contact us direct on 02 9449 2333 or at loans@planassist.com.au to find out more.
