Everyone dreams of owning their own home – an event that can bring in itself a huge sense of achievement. It doesn't matter if you want to have a home to start a family or launch into a property portfolio, purchasing a home with a mortgage is a massive life step – one that can have financial implications.
The spending habits of someone with and without a mortgage are significantly different so it pays to seriously think about the concept around mortgages before you jump in the deep end.
To help you with this decision, we sat down with Money Empire Manager Kayne Wahlstrom and Registered Financial Adviser Goran Loncar.
Are you going to change your spending habits?
One of the first things to consider before entering a mortgage is your ability to structure your own budget. "If you love purchasing all the latest big-ticket items, you might have to cut back your spending in certain areas before you get a mortgage," Goran explained.
Goran suggested working with a financial adviser who can first run through your current spending habits and match against the mortgage repayment options. There's possibilities for everyone, but in some cases, a radical shift of mind is required.
Should I wait to build my deposit?
It's now a buyer's market, but for many people, saving up a larger deposit can be tempting in order to avoid a significant mortgage. Kayne explained that considering the market conditions, you don't want to risk missing out on your dream home for the sake of a few thousand dollars.
"A lot of people ask us 'Should I act now or wait longer to save for a bigger deposit for my dream home?' in regards to their mortgage," he said. "While there's no set answer, it pays to know what you want, how much you are willing to spend/save and how this fits into your property goals."
Have I considered the other costs?
"On top of the mortgage payments, you can encounter rates, insurance and other bills."
A mortgage has the potential to be a significant figure, but that doesn't mean it's the only cost involved. Goran noted that a professional financial advisor will ensure you account for these costs and have the financial means to cover it.
"On top of the mortgage payments, you can encounter rates, insurance and other bills," Goran said.
What processes need to take place?
If you're thinking about getting a mortgage, it's certainly more than deciding one day and completing it the next. This means knowing what the process involves and who to talk to.
Regardless of what type of mortgage you're considering, this is where the Money Empire team can make a difference to your property experience. We can liaise with real estate agents, lawyers, accountants and property managers to ensure your property dreams come to reality. For more information, get in touch with us today!