You’re doing your numbers and realise you can only afford to buy a property for $650,000. An online search shows that you don’t have many options in this price range in the areas you want.

Do you compromise on size and quality to buy in the suburb you want or do you venture to other suburbs and comprise on location to get a bigger property?

For most people the first property is the foundation for their next property purchase. If this is the case, then we need to ensure that your first property is going to give you capital growth. Capital growth is what is going to provide you with the equity to use towards a deposit for your next property. Capital growth is driven by demand. Your first purchase should be in a suburb that attracts demand, i.e being close to the city where people work, close to public transport, close to main employment hubs etc.

What does it mean when we say ‘act like you already have the loan’.

As part of our ‘pre purchase checklist’ we encourage our first home buyers to ‘act like they already have the loan’ even before we apply for a loan with the bank. Just because the bank said you can borrow $1,000,000, doesn’t mean you should. Once you find out what the repayments on a $1,000,000 are, you may not want to commit to paying that repayment each month for the next 30 years. What this means is that we ask you to transfer the same amount of the proposed repayments into another savings account to see what impact it has to your actual cashflow budget. This is great way of testing the waters before you commit to a 30 year loan.