When you’re applying for your home loan, experts say it’s important to think ahead as you’ll need more than just the money for the deposit and repayments. Photo: Envato/Light Field Studios.
Buying your first apartment can be an exceptionally exciting time.
Finally receiving those keys after months, if not years, of saving seems like a dream come true to most people, but experts are warning potential buyers to save up that little bit extra before signing on the dotted line as additional expenses may be lurking.
Velocity Conveyancing director Andrew Satsias says that before committing to a purchase and signing the contract of sale, it pays to read the document carefully and have it reviewed by your lawyer as far in advance as possible.
“When you’re applying for your home loan, it’s important to think ahead; you’ll need more than just the money for the deposit and repayments,” Andrew says.
“Unless you qualify for a concession, stamp duty alone can set you back more than you might think, but it can get even more intense than that. Some contracts might not mention or be very vague about things like strata fees, contributions to repairs to the building and installation of an electricity meter on new properties.
“All of these items need to be budgeted for, and getting the right legal advice is important.”
Andrew says other considerations will be provided by your mortgage broker or banker, offering pieces of helpful advice: for example, watching the items you buy with your credit card may make the difference between loan approval and rejection.
Velocity Conveyancing director Andrew Satsias recommends seeking the help of a trusted adviser to ensure you aren’t surprised by any costs. Photo: Thomas Lucraft.
Finance providers look closely at your spending habits when assessing your ability to service a loan, so watch where you spend your money if you are looking to purchase.
“What might seem like small transactions on your credit card at the time, such as your daily coffees and smashed avo on toast, all adds up and it will impact the assessment of the serviceability of your loan,” Andrew says.
He says it’s important to remember that land and water rates are adjusted on settlement and will affect the final payment at that time, so keep a buffer for these charges.
He recommends seeking the help of a trusted adviser to ensure you aren’t surprised by any costs you might not have been aware of.
“A lot of the time, we’ll get clients come in not understanding the contracts they have been sent,” he said.
”Sometimes people just read and sign without realising what they’re signing up for and that’s when they get hit with unexpected costs, which can be very frustrating and somewhat scary for some people.
“We review the contracts in detail to ensure our clients understand exactly what they are committing to and how much they should be saving or getting ready to settle their property.”
Andrew says another thing to be wary of is the time between signing the contract and the settlement date.
“Just because you’ve signed the contract, it doesn’t mean everything is done and dusted. Cementing your finances well in advance of the settlement date is critical.”
To find out more about simplifying the process of securing your dream apartment, visit Velocity.
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