Happy New Year

I

Is buying property your new year resolution?

Consider the who, what, when, where and why.

Mortgage Choice, Australia’s largest

independently-owned mortgage broker, is

encouraging potential investors and ‘next’

homebuyers to fine tune their financial

strategy now for 2010.

With less competition expected in the

lower end of the market thanks to the

expiration of the First Home Owner Boost,

the new year could be a prosperous one

for buyers keen to further their foothold

in the Australian property market.

Those who have done their research,

know their borrowing limit and have

a good idea of the mortgage options

available will be well ahead of their

purchasing rivals.

Local franchise owner for Mortgage Choice,

Peter Johnson said,“Those who are savvy

will already be paying

attention to mortgage market commentary,

factoring a number of interest rate rises

into their budget, checking their loan options,

looking at getting pre-approval and carefully

considering if 2010 is the right time for

them to purchase. Deciding when is the right time

can help you avoid inflated house prices and

repayments you can’t really afford.”

If deciding ‘when’ they intend to buy has led

to sights being set on 2010,

potential buyers should consider the

remaining who, what, where and

why of property ownership.

“Whether it is your first or third property,

buying can be daunting when you are doing

it solo. So it is no surprise that 70% of our

2009 Potential Property Investor Survey

respondents plan to buy with someone else,

such as a partner, friend, family

member or colleague,” said Peter.

“Since the GFC and partly as a result of

tighter lending criteria, our brokers have

noticed an increase in enquiries from

borrowers looking to take out loans with

others so they can share the financial and

emotional commitment. Deciding who you

will buy with should be a well thought out

decision and it’s best to seek legal advice

to understand each party’s role and

responsibilities. Deciding on what type of

property suits your long term goals is just

as important. Consider what you hope to

achieve from the purchase and whether a

house, townhouse, unit or other fits best

with that. Weigh up each property type

and research the potential capital gains

within the area you hope to buy,

plus the demand for rentals and potential

rental yield if it is an investment purchase."

And consider the implications of location.

“Having a good idea of where you want to

buy may affect the type of property available

to you. Remember that property closer to the

city or coast often tends to be more expensive

and so it may be necessary to make allowances

for internal and external space.

You may need to extend the search parameters

while reconsidering what percentage of your

income you can really afford to make

repayments with. "

Why is all this thinking and planning

- borrowing sensibly, buying a suitable property,

preparing for rate rises, knowing your

long-term investment strategy, etc - essential?

"To reduce the potential for mortgage stress,

which no one wants to go through.

It is important for homebuyers and

property investors to have financial

dreams that are manageable and

attainable now, next year and in future,” said Peter.

To learn more contact Mortgage Choice at Sutherland

on 029521 1611.