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Financial Independence: The Royals Are Doing It, and So Can You

Prince Harry and Meghan Markle have declared their intention to forgo public funds and support their own lifestyle, and they’re not the only ones embracing financial independence. More than half of Millennials over age 21 receive financial help from a parent o.....

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The Ultimate Checklist: Buying Your Dream Home

  • Finance Check
  • Local Market Check
  • Title Search
  • Budget for Maintenance
  • Home Insurance
  • Property & Pest Control Inspection
  • Appliances Check
  • Price Negotiation
  • Settlement Prep

Few life events can compete with buying your dream home. Our homes provide the background for the drama of daily life. They shelter our families, provide us with neighbours and friends and protect our treasured possessions.

If you’re anticipating the purchase of your dream home, you might be overwhelmed with the sheer number of tasks required to reach that goal. But don’t worry. By following a simple checklist, you’ll soon be signing the papers and carrying your boxes through the front door.

At any step along the way, we can provide expert advice and assistance. Let’s start with the first task.

 

Finance Check

Before you start touring homes, conduct a thorough review of your finances. Purchasing a home can be an essential step toward financial security, but timing is critical. If you buy a property when you’re not financially stable, you could set yourself up for future troubles. On the other hand, when you build your purchase on a carefully constructed financial foundation, your dream home will be a valuable asset for many years to come.

The loan for your dream home may be the most substantial debt you ever incur, so it’s not something to enter lightly. As you review your finances, consider the following:

 

Job Security

Most lenders prefer that you’ve worked at the same job for at least 12 months before assuming a loan. They want to see a stable source of income; they’ll ask for details about your work. For instance, they’ll want to know if your employment is full-time, part-time or casual.

Shop around for loans. You’ll find different interest rates, loan terms and levels of customer service. We can help you to find the most suitable loan for your dream home purchase.

 

Cash for the Deposit

Your lender will likely require a 10 to 20 per cent deposit on the purchase of your dream home. How much do you currently have saved for the deposit? If you don’t have nearly enough, perhaps you could take on a side hustle or sell another asset. You might also reduce spending in some areas temporarily so you can save more for your dream home.

 

Local Market Research

But how do you know how much you need to save? Without a working knowledge of the local housing market, you might be clueless about how much your dream home will cost.

To learn about the local housing market, start paying attention to prices and sales. How long do homes stay on the market? Are buyers paying the full asking price? How much do homes cost that meet your description of “future dream home”?

Start paying close attention to these details. You might make a game of it by guessing the asking price of local homes for sale before finding out the actual listing price. Soon you’ll be able to spot deals, and you’ll also know how much you can expect to pay for the kind of house you plan to buy.

 

School for the Kids

With a firm grip of your financial situation and an understanding of the local market, you’re ready to think about the following detail: location! If you have children at home or your planning on having them down the track, proximity to good schools plays a vital role in narrowing down your site.

 

Public Transport

Prefer to commute via public transport? You’ll want to choose a dream home that places you close to your ideal transport options. Since this is an essential factor for many people, transport-friendly homes generally hold their value well.

 

Lifestyle

Your geographic location has a significant impact on your lifestyle, so be thoughtful about your decisions. Do you prefer to live in the central business district (CBD) or a more regional area? Do you need a close physical connection to future business prospects, or would you prefer more solitude and space?

 

Title Search

Once you’ve found a dream home that meets your needs regarding price and location, you’ll need a title search. The purpose of the search is to uncover any issues that could derail the home purchase later on. For instance, if the current owners have a $10,000 judgment against them, the loan will have to be reconciled before the sales transaction takes place.

 

Budget for Maintenance

Have you planned for maintenance expenses for your dream house? If you’re moving from a smaller home, you might be surprised by the increased energy costs. Some features, such as swimming pools or extensive gardens, may require significant, ongoing expenditures. Make sure you’re prepared for this hit to your budget.

 

Home Insurance

Lenders require you to cover your property with building insurance. But even if you purchase your home with cash, it’s still imperative that you protect your investment.

Shop around for insurance that meets your needs and fits comfortably within your budget. Every investment brings an element of risk to your portfolio. Fortunately, when you invest in real estate, you can mitigate a great deal of uncertainty with proper insurance.

 

Property Inspection

Most lenders require a property inspection before they’ll approve the loan, but again, even if you don’t use a loan for purchasing your dream house, it’s still wise to inspect it. A good property inspector will look at all the major systems of a home, from the plumbing and electricity to the foundation and ventilation. The last thing you want is a big, unpleasant surprise that will cost thousands of dollars to fix after the sale is over.

 

Pest Control Inspection

Even if your dream home has an incredible kitchen and impeccable design, you may want to pass on it if it’s infested with termites. That’s why you need a pest control inspection.

 

Appliances Check

In most home sales, major appliances stay with the property when ownership changes hands. Check all devices for longevity, and make written requests if any of them don’t pass muster.

 

Price Negotiations

If the property inspections uncover problems, you can negotiate the price based on those details. For example, if the roof needs repairs, you might ask for a lower sale price or request that the repairs be completed before the completion of the sale.

 

Settlement Preparation

Are you ready to sign the papers and move into your dream home? Here’s your final settlement preparation checklist:

  • Have your solicitor read over your contracts
  • Make sure you have enough funds in your account to cover settlement day costs
  • Sign papers and pay deposits
  • Set up your new utility accounts
  • Change your address with friends and businesses
  • Pack up and move in!

 

Next time you meet with your financial adviser, discuss how your dream home may affect your taxes and estate planning. We can help you with issues that arise along this journey. If you haven’t yet met with a wealth adviser or mortgage broker, reach out to us at Altus. We’re here to help you with every step.

 

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