If you want to have your own little piece of property to call home – you’ll need to start saving.
Building your savings
Buying a house is exciting and life-changing. What’s not as much fun is saving for the deposit. But the more money you put down upfront, the less you’ll have to borrow. There are many ways to save for a home that don’t require major changes to your lifestyle. With a good savings plan and some discipline, you’ll soon have the deposit for your home.
How much do you need to save for a home?
Aim to save a deposit of between 5 to 20% of the purchase price of your home.
Work out what you can afford, be realistic. You may need to consider a smaller property, an older property, or a property in a different area, just to get you started in the property market. Why not arrange a pre approval interview with Yvonne or David to see how much you need to save and how much you can afford to borrow.
To start saving start by doing a budget, write down your essential costs, such as rent, bills and food, and subtract this amount from your income. What is left over is what you could potentially save for your deposit.
Save 10% of each pay, this is a tip that always works if you’re prepared to stick with it. You simply need to pay yourself before you pay anyone else. The best way to achieve this is to designate one savings account – ideally a different account from your everyday account, to make it harder to access the money – and then transfer 10% of your net pay each pay period. It might mean you have to miss out on a few takeaway meals throughout the month, and you may have to take your lunch from home, but it will be worth it in the long run.
Buying a home
Steps of buying a home
Step 1: Pre Approval
Get a pre approval from Nova for a home loan; you will then know the maximum amount of funds that you have available to purchase your property
Step 2: Look for property
Real Estates – Newspapers – Websites
There are many points to consider when inspecting properties. Remember to ask yourself:
- Does it suit my needs?
- What are its faults?
- What are its features?
- How does the price compare with other properties seen?
- Is it the right location
Step 3: Checking the contract of sale
A seller must have the Contract of Sale ready before offering a property for sale. The seller must also provide with the contract:
- a Section 149 certificate from the local council, detailing zoning and other information
- a sewerage diagram
- while the majority of NOVA’s customers are based in NSW, it may be worthwhile including ‘a copy of the title folio from the Land and Property Information NSW, or relevant authority in your State or Territory.
- copies of all documents creating easements or restrictive covenants
- a cooling-off statement
- a notice directing parties to the Conveyancing Act 1919 (NSW) Section 52A and the Conveyancing (Sale of Land) Regulation 2017 (NSW), or relevant laws and regulations in your State or Territory.
- if it is a strata unit, copies of the folio of the Register for the lot and common property and a copy of the strata plan.
Step 4: Expressing an interest in a property
Once you have found the property you intend to buy, give a copy of the Contract of Sale to your solicitor or conveyancer to check. Once you make an offer, most real estate agents will ask you to pay an initial or part deposit as a sign of good faith. If you haven’t signed and exchanged contracts this payment does not ‘hold’ the property. It is refundable if you change your mind. You can still miss out if another buyer exchanges contracts before you. – Talk to your solicitor or Conveyancer for advice.
Step 5: Applying for a loan
You should submit a formal application to Nova Alliance Bank® for a loan on the property as soon as possible. You should not exchange contracts for the property (with or without the cooling-off period) before finance has been approved. Nova will then arrange a valuation of the property to determine whether the property is adequate security for the amount of the loan.
Step 6: Arranging inspections
- Building inspection – A building inspection checks structural soundness.
- Pest inspection – You should also have the property inspected for pests before buying it.
- Strata inspection – if purchasing a unit
Step 7: Exchanging contracts
When all the reports are in order and the loan is formally approved, your solicitor or conveyancer will organise the exchange of contracts.
The contract is a legal agreement between the seller and the purchaser. It sets out the terms and conditions of the sale
Step 8: Paying the deposit
On the date that the contracts are exchanged, the agent will request that you pay the agreed deposit stated in the contract. While the amount is usually 10%, it can vary by agreement.
Step 9: Paying the stamp duty
You will need to pay stamp duty which is calculated on the purchase price of the property.
Click here to calculate stamp duty.
Step 10: After exchanging contracts
It takes four to eight weeks from exchange of contracts until settlement. During this time, enquiries and searches are made and documents prepared by your solicitor or conveyancer. It is during this time we will arrange with you to sign your mortgage documents.
Step 11: Organising insurance
From settlement, when the property becomes yours, you are responsible for damage. Nova require a copy of current insurance before settlement. You can get a policy from CGU Insurance. Click here for a quote
Step 12: Making a final check
You should carry out a final inspection of the property to ensure that it has not been damaged and all fixtures and fittings listed in the contract are intact, this should be done as near to settlement as possible.
Step 13: Day of settlement
Settlement is the completion of the transaction; a date is arranged by both parties and your lender.
The key to the property is handed over at settlement or you can pick it up from the estate agent immediately after settlement.