HMcR Blog

Are you ready?

Purchasing your first home can be a daunting process. You may be used to a particular lifestyle such as renting in a share house or living with your parents. Could you cope emotionally with less money in your bank account at the end of the week, and less to spend on entertainment? Could you live in a place with an original bathroom, shag pile carpet and olive green floral wallpaper for a while? Are you ready to live in a new suburb which seems totally unfamiliar?

Who?

- On your own

- With others - whether it be your partner, a family member or friend.

When purchasing with others you must decide whether to purchase as joint tenants or tenants in common.

Joint tenants

- Each party owns the property in equal shares

- If one of the owners dies, then their share automatically passes to the other owners (even if they have a Will that gives their share to someone else)

Tenants in common

- Each party can own the property in equal shares, or unequally

- If one of the owners die, their ownership share passes to whoever is named in their Will

If each party has different deposit amounts or contributions we suggest you have a co-owners deed drawn up. This is a contract which can include how much each party will be repaid if the ownership were to end or there are problems. These can be prepared by lawyers.

Can I afford it?

The deposit amount required is approximately 10% of the purchase price of the property. In SA the First Home Owner Grant of $7,000 is available which may assist. Is there a possibility to live with your parents for a while to save more? Set up a meeting with your bank or a mortgage broker to determine how much you can borrow. They will require employment details and savings history amongst other things.

Do I have a HECS debt?

If you have a HECS debt don't be afraid that it will reduce your ability to borrow. Banks see university graduates as young professionals and are willing to lend to them. HECS debts rise annually with inflation which is minimal compared to home loan interest.

Where to buy?

Do I buy the worst house in the best street? Does the property have potential later on to be developed? But ultimately can you see yourself living in the house for 5-15 years as it is or does it require initial renovations?

Determine whether you are ready for a new and exciting time in your life. If you would like further information or advice please contact the team at Hattam McCarthy Reeves.


Elouise Barker

Image: scottchan / FreeDigitalPhotos.net