Guide to buying a home
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Buying a home is one of the biggest decisions you'll ever make. That's why it is important to be well prepared before you
start the process.
The information here is just a starting point. To find out more about Defcredit home loans, visit your local branch or
call 1800 033 139.
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Saving and budgeting
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When budgeting or saving for a home, whether you have a little or a lot of money is not really the issue. The important thing
is to use your money wisely.
The best way to do this is to take stock of your financial situation and how you manage your money. Then develop a realistic
budget and stick to it. A budget doesn't mean going without and being miserable. It just means clearing your debts as quickly
as possible, monitoring your finances, shopping carefully and only buying things that you really need.
A good way to save is to put money away as soon as you are paid before you can spend it. You will be surprised at how
this can increase your savings and result in a deposit for your home.
Your savings target will depend on the type of home you want to buy and the size of the deposit that you want to make at
the time of purchase. As a guide, most lenders require a minimum deposit of between 5% and 10%.
Check out Defcredit's range of savings and investment accounts to set you on the right savings track.
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Knowing what you can afford
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The most difficult part of the home buying process is finding a home you can afford, with the features you want, in the
area of your choice.
The amount you pay for a home will depend on a number of factors, including:
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- your preferred location or neighbourhood
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- your preferred type of home (apartment or house)
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- your income and financial commitments
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There may also be additional costs to keep in mind, particularly if you are planning to renovate before you move in. How
much extra can you afford to spend on improvements? Is it enough?
Before you begin searching for your home, it is helpful to know what you can afford to pay comfortably in loan repayments.
This will govern the total amount that you can pay for your home and will narrow down your search from the outset.
Depending on the type of loan you select, Defcredit can lend you up to 95% of the value of your property.
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Learning about the market
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Once you have worked out what you can afford to pay for a house, you can begin your search.
The first thing to do is to learn about the market. The more you know about local real estate values and prices, the better
informed your final decision will be.
Consider how far your preferred neighbourhood is from where you work, how far you are willing to travel each day, and
your lifestyle. If you have children (or intend to have children in the future), check out local schools. You might also want
to consider the location of public transport, parks and medical facilities.
If you don't know the area well, spend some time exploring. Walk and drive around in daylight and then again at night.
Get a feel for the distance to the nearest shops and recreation facilities.
Remember to do your homework. Go to as many auctions and open for inspections as you can. Study the auction results
regularly so that you get a clear understanding of prices in the area.
Talk with local real estate agents and let them know of your interest. However, when you are dealing with real estate agents,
keep in mind that they are working for the vendor, not the purchaser (you), and it is in their interest to get the highest
possible price for their client.
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