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A house for Christmas?

christmas houseWill there be a house under your Christmas tree? If you are thinking of buying property in 2011, the Christmas break could be the perfect time to reflect on how you will go about it.

Will you stay or will you go now? The very first thing to do is to look at your decision to buy and work out if it’s the right choice for you, whether you are a first home buyer or upsizing, or perhaps thinking of moving to something more manageable.

Can you keep renting for a bit longer to allow you to build a bigger deposit? Can you adapt where you are living to avoid paying the dreaded stamp duty on a new purchase? Or is it really just time to move?

Save on up Wouldn’t it be nice. A brand new house for Christmas. Wake up in the morning and Santa hasn’t bothered to squeeze down the chimney, he’s just lobbed a three-bed stunner on that vacant block you’ve been eyeing off.

Now of course, that’s just silliness. But if you are planning to buy a house or unit in 2011 and are working out how you can do it, the Christmas tree could be of some help. Or more so what goes under it. There’s two prongs to this. One – even though we all love to be generous at Christmas, don’t let the silly season blow your budget. You could try talking to family about setting a limit on how much presents can cost. Two – and this probably applies to first home buyers desperately saving to get a deposit together – it might be worth asking friends and family to swap a bought gift for cash to put towards your property.

Don’t be shy, if you are still at home your parents might only be too glad to do so if it means they can convert your bedroom into a gym or home cinema sooner than planned.

Go for the high interest Where you keep your money can make a big difference. Obviously under the bed won’t pay much, but surprisingly, many so-called savings accounts don’t do much better.

Investing your money where you can easily access it is a good idea in case you bring your property plans forward. If you have your savings locked away in a term deposit, or another investment that can’t be quickly converted to cash, you might find your dream property but be unable to buy it because you can’t get your money fast enough.

You’ll decide what investment suits you best, but regardless, do your research. If you want to hold your deposit funds in a savings account, go for the highest interest-bearing one you can find. Sometimes savings accounts pay as much or more than term deposits if you are willing to meet the requirements, such as setting up a minimum automatic transfer of funds into the account each month.

A starting point for researching what accounts pay more is to look at www.smh.com.au/money/tools-and-guides.

Remember to look at fees and charges. Some of the better accounts pay a strong interest rate and don’t charge you anything for the privilege.

Kill your debt There’s not much point in saving if you’ve got debt to pay down. For some unfathomable reason, people open up a high-interest savings account (good move) while at the same time running up their credit card bills.

If you’re saving, the first thing you should do is get rid of any credit card debt, and consider paying off other debt such as car loans too. That way all your money will be earning interest.

Do your research If you have decided you want to buy a property, it’s never too early to start thinking about where you would buy and what. You need to be realistic, and in this environment of rising interest rates, consider whether you could comfortably handle the repayments if rates jumped, say, 2 per cent.

You can research online, and start to drive around the areas you think you like. Attending open houses and units will give you a good feel for what things are worth in an area. Suburb profiles can be a handy way of finding out median prices and who lives in the area. See property reports on Domain.

Look at your finance options One of the biggest dramas about buying property can be arranging the finance. While you are in the planning mode, it’s a good idea to talk to a few financial providers and potentially a mortgage broker.

If you’re a first home buyer and have never had a loan before, it’s important to get your head around what type of loans there are and what are the features. You can do some preliminary research at www.smh.com.au/money/tools-and-guides.

Find your providers It can be quite stressful having to find a conveyancer or solicitor at the last minute, and even working out which pest and building companies are the best if you need to get a pre-purchase inspection done.

Once everyone returns from their summer break, you could start to talk to a few different providers to sound out who you might use when you do get to the buying stage.

Story by Caroline Boyd www.domain.com.au

Tags: housing, marketing, property, real estate

View the original article here

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