Buying Property – How to Get Started, Step 1 (Finance)

After more than 27 years as a property purchaser, I am often asked by both novice owner/occupiers and investors alike the same age old question, “How do I get started?”

The answer to which is not an easy one, but it is relatively simple.

Any outlay of funds (your hard earned money) should not be approached lightly.

So you should start with your Finances.

Question; Can I afford to make a property purchase?

Answer; Lets look at your “Financial Snapshot” to see what that tells us about your capacity to borrow the money and most of all the ability to service or repay that debt.

That is the starting point, a Feasibility Check, working together, we must consider your income, assets and liabilities (what you earn, what you own and what you owe)

Once we have those figures in front of us we can establish a sound basis on which to make a decision on whether you can proceed to a property purchase or not.

It is critical to the process that you do this exercise first and not to go blindly into a large commitment without what we loosely call a “Reality Check”

With a clear understanding of all the figures you can then determine your budget for the property purchase, this will save a huge amount of time and heartache in the near future as you will not be looking at properties that are beyond your actual budget.

Then comes the matter of Financing,

There are literally hundreds if not thousands of Brokers, Banks and Lenders in the market at the present.

Lenders usually require a track record of Savings for a minimum of (6) six months.

There are loan terms such as Principal and Interest, Interest Only, Variable Loans, Fixed Loans, Warrants, Deposit Bonds and Options just to name a few.

This Finance process can take up to (6) weeks to put into place.

Once the terms of the finance have been agreed on, then it is time to consider the Physical aspects of the property.

There are another 4 steps/stages of a property purchase and not enough space or time here to cover all of those areas of concern, I will publish related articles over the coming months.

Thank you for your time and I trust this article has given you some food for thought.

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