Buying Your Next Home

Our guide to buying your next home

The journey to buying your next home is not only an exciting time in your life but also a time that can be filled with difficult decisions that need to be made. So, we've gone to great lengths to break down the jargon and help you navigate buying your next home with ease. 

Here are some of the benefits of banking with us when you're buying your next home. 

• Speaking to the same person every step of the way
• Access to our competitive home loan rates
• The ability to borrow up to 95% of the value of the property, inclusive of Lender Mortgage Insurance

Step 1: What to consider when buying your next home  

First steps to buying your next home 

Buying your next home is a huge decision and often a life altering event with many highs and lows along the way. Maybe you're ready to upgrade from a townhome to a larger home, or maybe you've finally found your dream holiday house at the beach. Either way, we're here to help simplify the process. 

Here are some key points to consider when buying your next home:

• Set yourself a budget and understand what your current expenses are 
• Understand what you can borrow 
• Know what your deposit amount needs to be 
• Consider how long you intend living in the new property 
• Know what your new monthly repayments will be 
• Understand what your current property is worth 
• Work out a savings plan for rainy days 
• Understand what the upfront and ongoing costs are going to be 
• Once you've settled on a potential suburb, research the area and home pricing 
• Know if you plan on selling your current property or intend on keeping it as a rental property 
• Understand the tax implications of keeping your current home as an investment property

For tips on how to pay off your home loan sooner check here

Step 2: Decide what you’ll do with your current home

To sell or not to sell? That really is the question. When purchasing your next home there many different paths you can choose, each with significantly different outcomes. Choosing to either sell your current home or keep it as an investment property will likely be a decision that will require a lot of thought. So, we've broken it down for you.

Here are some extra things to consider when buying your next property: 

• Using your home as an investment property - depending on how much equity you've built up in your current home, you may be able to put it towards the deposit of your next home, if you convert your current home into an investment property. This is a complex situation and you should consider getting financial advice before deciding whether it's right for you. There will also likely be tax implications to consider. 

• Selling your house before buying a new one - Putting your house up for sale before buying your new one will avoid the cost of two mortgages, but you will need to arrange for a place to stay once your house is sold. You'll have a better understanding of your budget and buying power and less pressure to take a lower offer, but increased pressure to find a new home after you sell. 

Step 3: Understanding what your costs are

Your upfront and ongoing costs

Once you've decided if you're selling your current home or keeping it as an investment property, it's important to consider all your expenses, including not only the more obvious upfront costs, but also the ongoing costs of property ownership too.

Upfront costs:

• Stamp duty - we've got a handy stamp duty calculator here
• Lenders Mortgage Insurance - only required if you have less than 20% of the home deposit
• Legal fees - for completing conveyancing and title searches on your new home
• Building and pest inspections 
• Home and contents insurance 
• Property valuation 
• Remodelling - on your new home and existing home should you choose to keep it as an investment property
• Connection fees 
• Real estate leasing or selling fees
• Moving costs 

Ongoing costs: 

• Mortgage repayments 
• Council rates 
• Body corporate fees 
• Utilities  
• General maintenance eg. cleaners and gardeners 
• Repairs and breakages eg. leaking taps
• Landlord insurance eg. covers you in the event the tenant refuses to pay rent 
• Property management eg. should you hire a vendor to manage the rental process 
• Contents insurance to protect your valuables 

Find more out about stamp duty here

Step 4: Working out your buying budget

What you can borrow and afford

Now you know what your upfront and ongoing costs will be during and after purchasing your next home, it's important to drill down on your budget. Every investment journey should begin with a clear budget in mind.

When organising your budget don't forget to also include what you plan on saving per month to help you work towards any future financial goals you might have. Remember your borrowing power will be likely be affected by your income and also your expenses. 

For a budget planner tool check here

Helpful tools for buying your next home 

Get buying, selling, moving faster with our budget calculator 

These tools make it easy to calculate how much you can save based on your income and expenses. These calculators can also help you determine what you're spending and where and how you can monitor your monthly expenses to make your property purchase easier. 

Step 5: Choosing your home loan for your next property

Choosing the right home loan for your next property purchase is just as important as finding your first home loan. Your new home loan will need to have all the features that suit your individual needs. 

Some considerations to keep in mind when selecting your next home loan: 

• Principal and interest loans
• Interest only loans 
  
• Split loan 
• Fixed rate loans 
• Variable interest rate loans 
• Redraw facility 
• Mortgage offset 

For tips on how to pay off your property sooner check here

Step 6: Approval for your home loan

Even though you've already done this once, we're here to provide you with a quick refresher course. When you're applying for your home loan the lender will asses you on many factors. The assessment will be broken down into three categories; what you earn, what you owe, and what you own. 

Some of the factors your lender will assess you on during your home buying journey: 

What you earn 

• Salary 
• Investments 
• Rental income 
• Government income 

What you own

• Savings 
• Substantial personal assets 

What you owe 

• Credit cards or loans

Here are some important documents you'll need as proof of identification: 

Primary identification 

• Current drivers licence and/or current passport or birth certificate 

Secondary identification 

• Council rates notice, credit card, debit card, Medicare card, health care card 

For more tips about equity when investing check here

Step 7: Final steps for buying your next home

After you've made a formal offer and reached an agreement with the seller of your next home, the settlement process on your new property can begin. On settlement day, your legal and financial representatives will ordinarily meet with the seller's representatives to transfer the ownership of the property from the seller to you (the buyer). 

To prepare for settlement, you'll likely need to do the following:

1. Contact a solicitor or conveyancer to review your contract of sale before you sign it
2. Return your signed contract of sale to the seller or the seller's agent
3. Speak to your lender to start your home loan application. Ensure you have all your necessary documentation
4. Speak to your solicitor or conveyancer about requesting any property searches you may want or need
5. Organise a building and pest inspection
6. Ensure you have enough funds to cover the property settlement and solicitor’s fees
7. Organise your final inspection of the property.  This is usually done on the day of settlement or close to it
8. Collect your keys on settlement day and celebrate your new investment property

Here's some improvements that could increase the value of your property

Ready to get started? 

We're here to answer the questions you might have.