Have recent rate increases made you hesitant to enter the real estate market in Queensland, Australia, especially in Townsville, Brisbane, and the Gold Coast? It's a buyer's market for a reason, so you're not alone. Here are some tips for remaining composed when purchasing your next home.
The Reserve Bank of Australia (RBA) has raised the official cash rate from 0.10% to 3.35% in just nine months, as you have probably seen in the news.
It’s now at its highest point since September 2012, so it makes sense to feel a little hesitant about purchasing real estate at this time.
But rest assured that you can manage rate increases and lessen potential financial strain if you have the right buying strategies in place.
Learn how much you can borrow, and think about buying a little less than you can afford as a safety net.
That’s because your financial situation or personal circumstances could change during the many years it takes to pay off a home loan, and interest rates could increase further.
You can build up a financial cushion to respond to unforeseen changes by making purchases that are a little below your purchasing power.
Before you begin looking for a home, we can help you determine your borrowing capacity so you don’t fall in love with a location that might cause you more financial stress than it’s worth.
A market softening brought on by rising interest rates and inflation may benefit buyers who are ready to act now.
According to CoreLogic, “it’s a buyer’s market”, the median time a property was on the market in Australia’s capital cities during the three months ending in December increased to 31 days, while it took 41 days in regional areas.
From a median of 20 days in November 2021, that is a significant increase.
Tim Lawless, executive research director at CoreLogic, says that buyers are no longer under pressure to decide whether to buy and that this allows them to bargain more forcefully on price.
“They can simply move on to the next property amid persistently declining prices if they are unable to secure a price they believe represents good value.”
Additionally, you might have more negotiating power if you focus on homes that have been on the market for a while (just make sure to do your research first!).
There are several government schemes that might help you pay off your new mortgage faster and for less money overall.
For instance, through the NHFIC, the federal government provides low deposit, no lenders mortgage insurance (LMI) programs.
The schemes can shorten the time it takes to own a home by an average of 4 to 4.5 years and save eligible first-time homebuyers thousands of dollars.
All state and territory governments, with the exception of the ACT, provide grants for first-time homebuyers, and all but South Australia provide discounts on stamp duty to make buying a home more affordable.
Depending on the state, stamp duty can add an additional 3-4% to the value of your property, so it makes sense to keep this sizeable sum in your pocket.
We know everything there is to know about government programs and can guide you through the eligibility requirements. We can also look into the possibility of combining the plans for greater savings.
The loan with the incredibly low-interest rate you saw in a Facebook advertisement might have seemed like a complete steal, but did you read the fine print to see the staggering fees?
And did you know that applying for multiple loans to compare rates on a home loan can harm your credit score?
You can avoid these typical pitfalls and more by talking to a mortgage expert like us in Townsville.
We can assist you in locating the ideal lender, home loan rate, and terms to meet your specific requirements in Townsville.
Even better, we can guide you through the red tape and organise your finances for your application.
Give us a call right away if you’ve been feeling a little nervous about buying given the state of the economy right now. Nothing makes us happier than assisting people in navigating the complexities of the financial and real estate markets in Queensland, Australia, especially in Townsville, Brisbane, and the Gold Coast.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au in Townsville.
Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.
