Four and a Half Fun Facts
There are many things to think about when buying a new house. Here Lance Shearman covers off four quick house-buying facts that will help you cover your bases, plus an extra one to tuck away from our in-house fashionista.
1. Interest Rates
Interest rates will rise and fall, so try, if you can, even for five minutes, not to focus solely on rate prices! Instead, also think about structuring your home loan and time frames by asking yourself these questions: What is the best loan structure for the future plans I have? If or when will I buy my next or first property? How can I make my money work for me? And what is the best way for me to reduce debt?
Solely purchasing land is different to purchasing a property on land. For land you'll need a 20 per cent deposit and it will require a registered valuation. In Christchurch the land will need questions answered around what the earthquakes have done to it. This will affect the deposit required (can send it up to 40 per cent in some cases). The size of the land and the zoning will also affect the deposit required.
3. Ducks in a Row
When purchasing in this current market, tick off as many conditions as possible.
"Speed is the essence of war. Take advantage of the enemy's unpreparedness;" -Sun Tzu, The Art of War
While "enemy" is a slightly over the top way to look at other prospective buyers, when you're at the bargaining table or nervously waiting in the auction room, it's good to be as prepared as possible. So take some time to get those ducks in a row.
4. Bridging Finance
When the purchasing of your new home and sale of your old home don't quite match up, you will likely need bridging finance, but this can add another level of stress when purchasing. So, if possible, settle your existing property on the same day as settling your new property.
4.5. Fashion not Function
Not wearing socks with dress shoes is a risk. However, fortune favours the brave!
Lance Shearman is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.