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Next to your wedding day perhaps, settlement day on your first home is likely to be the most exciting and stressful day of your life.

It not only brings an end to the hard work and perseverance it takes to save your deposit and find the home of your dreams, it marks the beginning of your new life and your very own happily ever after. But how can you stop yourself from biting your nails to the quick on the day the vendor hands over the keys? Here are 5 tips to make your settlement day go smoothly.

Tip #1. Get a good conveyancing solicitor.

Property settlement is the legal process of transferring ownership of a property. In order to make it go as sweetly as possible, you should engage the services of a reputable conveyancing solicitor well ahead of time and ask them to explain the regulations and procedures required by the government in your state.

During the settlement process, your conveyancing solicitor will complete the following tasks:

  • Inspect the sales contract and ensure enough time has been allowed between the finance approval date and settlement date to complete the paperwork.
  • Prepare the documentation you need to sign – transfer of ownership, transfer of land, stamp duty application, authority to proceed, etc.
  • Ensure that all the paperwork is correctly completed, verified and filed by both parties.
  • Check that any existing debts or mortgages against the property are paid off.
  • Perform a title search and check everything is correct with the certificate of title for the property.
  • Register the transaction with all of the appropriate authorities.
  • Help us to co-ordinate the necessary lender property valuation required before we can get your final finance approval.
  • Work with us to ensure the cheques are ready on the day and the lender and other interested parties are present at the exchange.

Tip #2. Check the details in your sales contract carefully.

The sales contract you sign when you agree to purchase the property is a wealth of information and very important to settlement day. It’s a good idea to get your conveyancing solicitor to check it before you sign or put down your deposit so that you are sure it provides all of the required information.

Your sales contract should outline all of the conditions of the sale, what is included in the sale, what actions are required to complete the sale, the schedule for completing these actions and who is responsible for completing them. If you show your sales contract to your conveyancing solicitor before you sign it, you can ask questions about anything you don’t understand.

Tip #3. Get your finance in place before you sign the sales contract.

Settlement day is the big day when your mortgage comes into effect and your chosen lender pays the money to the vendor. To ensure your settlement day goes according to plan, it’s vitally important to get the timing right on this transfer of funds.

During busy periods, it can take several weeks for a home loan to be approved by some lenders. If you don’t want to limit your choices to the few lenders who are able get your loan through according to the timing on your sales contract, then it’s a good idea to talk with us and check the turn-around time a lender will need to process your loan before you sign the sales contract, so you can make sure it allows enough time.

You should also bear in mind that any other government fees, charges and duties must also be paid on settlement day. Just ask us and we’ll help you calculate these costs.

Tip #4. Get insurance and do a property inspection.

A lot can happen to a property in the time between signing the sales contract and collecting the keys. It is likely the property will be vacant during this time and to ensure there are no break-ins, thefts, storm damage or worse, you should include a clause in the sales contract allowing you to inspect the property just prior to settlement day to see for yourself that everything is still in good order.

To make sure you’re fully covered for any insurable event, it is also a good idea to take out insurance on the property when you sign the sales contract. It is not a good idea to trust the vendor to keep the property fully insured until settlement day. Insuring it yourself could save you money and trouble if something should go wrong, so don’t forget to ask us if you need help organising some cover.

Tip #5. Set your moving in date a few days after settlement day.

Delays can happen on settlement day, no matter how carefully you plan. People can miss meetings or take the day off sick, cheques can be held up, even the weather has been known to throw up unexpected obstacles to make completion impossible on the set date.

We recommend that on settlement day, you find a relaxing place to wait for the news that settlement has been successfully completed and to receive the keys. If you plan to move into your dream home a day or two later, you’ll have the time to sit back and enjoy the experience of becoming a new home owner before you need to do the heavy lifting required to actually get your stuff in there and start living happily ever after.

As your mortgage and finance broker, we’re here to help you make sure that you can complete the purchase of your new home with as little hassle and stress as possible. Ask us to help you get pre-approval on your home loan, and if you need a referral to a good conveyancer, we’ll be happy to help with that too.

Saving up your deposit is the first step in buying a home and when your bank account balance starts to look good it’s easy to get excited. But it pays to be realistic. Exactly how much money is enough? In this article we take a look at some of the upfront costs involved with buying a home to help you set a proper savings goal before you make your move.

The deposit you contribute towards your mortgage is only part of the funds you need to purchase a property. Many first-time buyers assume that 10% of the purchase price will be enough to cover everything, but unfortunately that isn’t necessarily the case. There are many costs involved in purchasing a property, let’s take a look at other things you need to think about as part of your purchase.

1. Deposit on your mortgage

It used to be possible to borrow nearly 100% of the purchase price of the property, and use your savings to cover the other expenses, but these days that’s usually no longer the case. Most lenders require you to have at least 5% of the purchase price to put towards your mortgage. Depending on the home you want to purchase, the lender may even require you to put 10 – 20% of the purchase price towards your mortgage. Have a chat to us about different lender’s criteria to ensure you know what you can afford.

2. Stamp duty

Stamp duty is a cost that varies from state to state and it is calculated against the price of the property you wish to buy. We can help you calculate approximately what your stamp duty costs will be on the price range of home you’re looking at, so talk to us when you’re planning your budget.

3. Lenders mortgage insurance

Unless you have a deposit of 20% or more to contribute towards your mortgage, the lender who is providing your loan will require you to pay lender’s mortgage insurance (LMI). Unfortunately, the cost of this will also vary. LMI is calculated according to how much deposit you have, how much you intend to borrow and how much the home costs to purchase.

4. Borrowing costs

There are a range of different fees that apply to getting a mortgage. These differ from lender to lender and loan to loan, but generally speaking, you will need to allow for things such as application fees, lender valuation fees and a settlement fee. Some lenders also charge for legal supervision at settlement and document processing. Again, ask us what these costs could be with your chosen lender, and we’ll help you to fit them into your budget.

5. Pest and building inspections

Getting a building and pest inspection usually costs around $400, but this will vary depending on the size of the property. It really is worth the expense because it could cost you a lot of money to fix any problems the property may have after you purchase it. By getting a building and pest inspection before you buy, you’ll know exactly what you’re up against and have the opportunity to choose a different property if it looks like you can’t afford the repairs.

6. Conveyancing

You will need to employ a solicitor or conveyancer to legally transfer ownership of the property you are buying. They will also perform all the property and title searches necessary and take care of the documentation. Conveyancers can also explain sales contracts, take a look at your section 32, auction terms and any other legal elements of purchasing a property so that you fully understand what you’re getting into.

7. Insurance

Your lender may require you to take out building insurance on any property you wish to purchase. This is not only an upfront cost, it is ongoing and you’ll need to maintain this cost annually. You have the freedom to shop around amongst the various insurance carriers to get yourself a good price. Once you move in, it is also a good idea to get contents insurance as well. Usually the two can be bundled together so you can save on purchasing them individually.

8. Moving-in costs

Many people get so excited about getting their first home they forget to calculate their moving in costs and include them in their budget. Remember that you may need to hire the services of a removalist to move in your stuff, and that can be expensive! There’s also likely to be items of furniture you’ll need to buy and most people want curtains and blinds at the windows.

You’ll also need to pay to have your utilities connected. These may include telephone, internet, gas and electricity.

9. Contingency funds

Last but not least, it’s important that you have some funds put aside for any unexpected expenses. Of course, it’s difficult for us to predict what these may be, but you never know when you might encounter a problem. Perhaps you’ll have a blocked drain that requires a plumber, or light sockets that don’t work and require an electrician. It’s all part of the fun of owning a home!

Although this may sound daunting, remember, we’re here to help you budget to purchase your property and help to make sure there are no hidden surprises. If you’re getting ready to purchase a home, please don’t hesitate to give us a call for a chat. We’ll help you determine whether you’ve saved enough money to cover your deposit and all your expenses. We can also help you get pre-approval for your home loan so you can get started on searching for your dream home! Please call us today.


Copyright 2016