I was thinking about buying a property...I saw that some prices are tending to decrease. Is it a good time to do it? Or should I wait? I was waiting to have a higher down payment but maybe there are interest benefits currently that allow me to buy at an overall lower price.
Stacey in Wellers Hill, Qld
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This is an interesting question that we are seeing asked lately. Is the time right to buy? Is this the bottom?
Without a crystal ball, nobody can definitively tell you that from an investment perspective, although you would expect with a long enough timeframe you would see some level of return in property. If you’re looking at the property purchase and you are going to be living in it for the years ahead, the decision becomes easier with the following important considerations:
Does it make sense to your financial situation?
Just because you can, doesn’t mean you should. Consider goals alongside home ownership and make sure you are taking steps towards them. A large financial commitment such as a home purchase has a tendencies to kick other goals down the line! Ideally, you will be able to afford the minimum repayments and have a healthy surplus in your personal cashflow to make decisions with. This may be paying your debt down more aggressively, or contributing towards other goals such as lifestyle or wealth creation.
Which property are you going to purchase?
Often people don’t do a lot of research into properties that they are buying, relying on “gut feel” or buying in a good area. This can be expensive if something is overlooked. I’d suggest locating a buyer agent service that will take the time to understand your needs, be it for a house to live in or an investment opportunity and locate the appropriate property for you. This service is not free, so take the time to partner with somebody that you feel understands you. The money paid for this service can save you from a mistake.
How are you going to finance the purchase?
This is a big one, I’d suggest that you locate a mortgage broker that has a good reputation with plenty of reviews so that you know what to expect. A mortgage broker can make a very big difference to how much interest you pay over the term of a loan, through their relationships and ability to negotiate the rate on your behalf. It is also a service that does not usually cost, so you won’t be out of pocket for it.
- I’d suggest that you assess your ability to pay repayments on a monthly basis, comfortably.
- Once you have this information, talk to a broker about your capacity to borrow.
- Armed with this, find a reputable buyer’s agent to discuss your options.
I wish you all the best and if you’re in doubt in how to apply the above to your situation well, I’d suggest talking to a financial adviser who can assist you in connecting the dots for you.
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