Buying a new home

Whether you’re looking to sell your current house and buy another, or build a portfolio of investment properties, buying a new house can be a tricky process. That’s why we’ve developed a suite of products that will suit whatever situation you’re in.  We’ve put together a guide designed to walk you through the purchase process and make things as easy as possible, no matter what you’re looking to do.  

Before you buy

Before looking for your new property you’ll need to do some preparation to make sure you’re ready for what’s involved:
  • What will the new property’s role be? – Before you start looking at new properties you’ll need to decide what you want from the new house. Will this be a new home that you’re moving in to? If so, will you keep your current property for investment purposes? Do you want to stay in your current home and buy a new investment property? These questions are best answered before entering the market.
  • Get some advice – By talking to a mortgage broker or credit professional you’ll get a second opinion on your current situation, as well as a professional’s guide to what the market is currently doing. Their advice should help you answer the questions above and should also give you an idea of which loans might suit your needs. They’ll also be able to look at your current and projected financial position, to give you an outline of the amount you may be able to borrow.
  • Do your research – If you want to use either your current or your new property as a rental property, do some research into what you could expect to receive in rent by looking at the advertised rental prices of similar properties in that area. This will allow you to map out a budget of how much you might need to contribute to cover any gap in the mortgage payments. If you’re looking at selling your current property, look into what similar properties have sold for in your area recently, and also how long they have taken to sell. This will give you an idea of the proceeds you might expect from the sale and how long it takes to receive the proceeds.
  • Set a budget before looking – Combine the advice you’ve received from your mortgage broker or credit professional and the information you’ve discovered as a result of  your research to determine how much you will need to borrow and what you’ll end up repaying. Use our calculators as a guide to help determine your repayments on different loan amounts.
  • Start the application process – Speak to your mortgage broker or credit professional again now that you’ve made a decision about what outcome you want from the new purchase and ask them to begin the application process for you. This will allow you to be ready to proceed as soon as possible once you find the ideal property.
  • Start looking – Now comes the fun part. With your budget in place and your mortgage broker or credit professional getting your application up and running in the background, it’s time to start looking. You can start by contacting real estate agents, looking through newspapers, scouring the Internet or just driving through your desired suburbs, looking for houses for sale until you find the one that is just right.

Things to consider

Here are some handy hints to remember when buying a new home, and possibly selling your current home:

  • Bridging finance – You may need to take out bridging finance to allow you to purchase your new property and move in before your current one has sold. For more information on bridging finance, view our bridging finance fact sheet  or chat to your mortgage broker or credit professional.
  • Prepare your current property – Whether you plan on either selling your current property, or renting it out to tenants, you’ll need to make sure it’s in tip top shape before beginning either process. This means finishing all of those odd jobs – such as the gardening and clearing out your cupboards – and completing all the projects you’ve been ignoring for months. These can all have a big impact on either the sale price or the rent you can charge.
  • Legal advice – While you’re able to act on your own behalf when purchasing a property, the documentation and settlement process can be quite complicated and includes many legal requirements. Buying a home is often the biggest purchase you’ll ever make and it’s strongly recommended that you use the services of a solicitor or conveyancer. They’re experts in this area, and they’ll ensure that everything runs smoothly and is completed correctly.
  • Take a good look – You want to make sure you don’t get any nasty surprises after you move in, so you need to give any prospective properties a thorough inspection before committing to the purchase of a property. Some tips include inspecting the property multiple times at different times of day, visiting on a rainy day to check for any leaks in the walls or problems with the guttering, and looking under carpets and rugs for the state of the floorboards underneath. You should also check on the other side of the bathroom walls to make sure there are no signs of water damage and to see whether the walls or ceiling show any cracks or signs of movement.
  • Arrange a professional inspection – You should organise a building or pest inspection. While this may cost a little up front, an inspection could help you avoid getting hit with much higher costs from unseen problems in the future, which were not obvious to the untrained eye.
  • Know what you want – Sit down and work out what you do and don’t want from the house you buy, so you have a list you can work through when you inspect properties. It helps to split this into a list of ‘must have’ and ‘nice to have’ features, which may make the decision easier if you’re weighing up one house against another.
  • Insurance – There are four types of insurance policies that you may need to consider when buying a new property: home insurance, landlords insurance (if you’re buying an investment property), Lenders Mortgage Insurance (LMI) and loan protection insurance: 
    • Home insurance will cover your new house (this can also be home and contents insurance) and is compulsory for any loan to be approved, however you should look for policies that provide free cover from when you sign the contract up until the day you move in.
    • Landlords insurance is specialised insurance to cover your property if you’re renting it out. This covers not only the building itself, but can also provide cover for some of your belongings on the property, as well as protecting you from some situations where the property cannot be leased out.
    • LMI is offered by an external provider and it enables you to buy a home with less than a 20% deposit. An up-front fee (or premium) is paid to the external provider, which insures your lender against non-payment or default on your home loan.
    • Loan protection insurance is a policy that covers you for situations that may arise in the future, which affect your ability to pay back the loan (e.g. death, disability or unemployment for anyone attached to the loan).

arrow-left.gif The lending process

Our suggested products 

SmartSaver

A basic home loan with a competitive variable rate and no monthly fees. SmartSaver has the flexibility of redraw, voluntary repayments without penalty and a choice of principal and interest or interest only repayments.

Download the SmartSaver fact sheet

SmartFit

A fully featured variable home loan with a 100% offset account to maximise the benefits of any savings you build up by reducing the interest charged on your home loan. The SmartFit loan also offers interest only repayments of up to 5 years for Owner Occupied and investors looking to pay back only the interest incurred on the loan.

Download the SmartFit fact sheet

SmartFix

A fully featured home loan with the option to fix your interest rate from one to five years, with a 100% offset account. The locked in repayments over your fixed term allow you to take control of your budget, while still benefitting from the interest offset for any savings you build up. The SmartFix loan gives customers the choice of making interest only repayments to allow investors to pay back only the interest incurred on the loan.

Download the SmartFix fact sheet

SmartDoc

A home loan which allows self employed customers to sign an income declaration form with accountant verification, instead of providing proof of income documentation. The SmartDoc loan comes with a fully featured 100% offset account to reduce the interest charged and the option of interest only repayments of up to 5 years for Owner Occupied and  investors to minimise their costs. Variable and fixed interest rates available.

Download the SmartDoc fact sheet

Go-Between

Download the Go-Between fact sheet