4 Helpful Tips When Buying Your Next Property 

Have recent rate hikes made you nervous about taking the plunge into the property market? You are not alone! It is a buyer’s market for a reason. Here is how to stay cool and calm when buying your next property. 

As you have probably seen, the Reserve Bank of Australia (RBA) has increased its official cash rate to 3.60%. It is now the highest it has been since September 2021, so it is only natural to feel a bit hesitant about buying property right now. But rest assured, with the right buying strategies in place, you can navigate rate hikes and mitigate potential financial stress. 

1. Know Your Borrowing Capacity 

Get to know your borrowing capacity and consider leaving yourself a bit of a buffer by purchasing under the maximum amount. That is because, over the many years it takes to pay off a home loan, your financial and personal circumstances may change, and interest rates could rise further. 

By buying under your capacity, it will allow you to create a financial buffer to adjust and adapt to any unforeseen changes. 

We can help you calculate your borrowing capacity before you start hunting for a property so you don’t fall in love with a place that could create more financial stress than what it is worth. 

2. Take Advantage of It Being a Buyer’s Market 

With rising interest rates and inflation, there has been a softening of the market, and this may reward those who are ready to buy now. According to CoreLogic, “it’s a buyers' market!” 

In the three months to December, the median time a property spent on the market increased to 31 days across the capital cities and 41 days in regional Australia. That is a big increase from a median of 20 days in November 2021. 

This means that buyers are no longer facing a sense of urgency when making a purchase decision, and they can negotiate on price more aggressively. If they do not secure a price that they think reflects good value, they can move to the next property amid the declining prices. 

By targeting properties that have been on the market for a while, there could potentially be more bargaining power (but make sure to do your due diligence). 

3. Take Advantage of Government Schemes 

There are several government schemes that may help reduce the size of the mortgage and other associated costs. 

For instance, the federal government offers low deposit, no lenders mortgage insurance (LMI) schemes through the NHFIC. The schemes can save eligible first home buyers thousands of dollars and speed up home ownership by 4 to 4.5 years on average. 

All state and territory governments (except the ACT) offer first-home buyer grants, while most (except South Australia) offer concessions to take the stamp duty sting out of house buying. On average, stamp duty can tack an extra 3-4% onto your property value depending on the state and property price, so keeping this hefty sum in your pocket is a good deal. 

We have all the low-down on government schemes and can help you navigate eligibility criteria. We can also explore the possibility of bundling the schemes together for more savings. 

4. Let Us Help Guide You

That super-low interest rate loan you saw on a Facebook advert might have looked like an absolute steal, but did you notice the eye-watering fees in fine print? Did you know that shopping around for a home loan by sending in multiple loan applications can negatively impact your credit rating? 

Speak to a mortgage professional like us, to help you avoid common pitfalls. We can help you find the right lender, home loan rate and terms that will suit your individual needs. Better still, we can help you organise your finances for your application and navigate all the red tape. 

So, if you have been a bit nervy about purchasing in this current financial climate, give us a call. We love nothing more than helping people navigate the complexities of the finance and property markets. 

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au