3 Things to Understand Before Signing Any Documents
Buying a first home or an investment property is an extremely important financial decision. You’ll have to go through a large amount of paperwork and work with several industry experts, including your mortgage broker, solicitor, building inspector, local council and more.
Understanding the terms and conditions of the property buying process is extremely important. You should never sign a legally binding document without making sure you are fully aware of what it contains — even if coming to that understanding is a bit of a burden.
Here are a few things to remember when dealing with documents related to buying a new property.
Carefully Go through Your Maintenance and Infrastructure Report
Before buying your property, you’ll need a professional inspector to create an infrastructure report on every aspect of the building. Thoroughly reading this document is extremely important, because it will affect liability should any issues occur within the building. By signing the report, you’re agreeing that you understand all of the existing risks of buying the property — including potential structural damage, environmental risks, and immediate maintenance needs.
Your maintenance and infrastructure report will let you know what kinds of work needs to be done on the house before it is considered safe to live in, or what improvements are needed in the near future. Unless you are moving into a brand new building, this section of the report can be extensive. Often, homeowners will choose to buy a fixer-upper at an under market rate, then follow the maintenance report’s suggestions to make it a liveable space.
What is Your Collateral?
If you are not paying for your deposit entirely with cash you are likely using another asset as collateral. If there are any financial issues in the future, such as the need to declare bankruptcy, you may have your property seized if it is used as collateral in the agreement. Make sure you understand the risks of what you could lose when you sign financial agreements that may be broken in the future.
What Mortgage Structure are You Agreeing to?
You should fully understand what kind of structure you’re agreeing to — whether you have fixed or floating interest rates, an overhead account, interest-only or another payment structure. This way, you won’t be surprised if your interest rates change one month, and you’ll be able to analyse your mortgage bills yourself. You should also make note of how many years you are agreeing to pay, at what rate, and what the consequences are if you fail to pay on time.
Multi Choice Home Loans cares about our clients, whether it be first home buyers looking for their first home, families looking to upgrade to their next home or couples looking to downsize. We offer clear, unbiased advice because we are not tied to any one loan provider. Get in touch with us and we can give you free loan comparisons. Call us on 1300 36 36 99 or send us an email and a mortgage broker will get in touch.