Buying a home can feel daunting – so we've broken the process down into seven key stages.
1. Research properties
The best way to start is with a clear picture of what you need. Are you looking for a unit or house, with two bedrooms or four? Close to school and public transport? In a quiet location or a bustling neighbourhood? Our Tips for Buying the Right Home will help you decide. And if you're going to auctions, we have Tips for that too.
We can usually lend up to 90% of the value of the property. So you could consider buying anything, as long as you can put in at least 10% of the purchase price. Use our Borrowing Power calculator to work out exactly how much you could afford.
But remember, you also need to take into account the other costs associated with buying:
- Loan set up costs
- Conveyancing/ legal fees
- Stamp Duty
Of these, Stamp Duty is the biggest expense after your mortgage and it varies from state to state. It's payable on both the purchase price of the property you're buying and the amount you borrow. You can work out how much it's going to cost you with our Stamp Duty Calculator.
If you're borrowing more than 80% of the value of your property, you will also need Lender's Mortgage Insurance. This is usually charged as a one-off premium and calculated on a sliding scale. In other words, the greater the percentage of the property value you borrow, the higher your insurance premium.
3. Which loan?
We want to make choosing the right home loan as easy as possible, speak to our friendly home loan experts on 1300 694 722, or visit an HSBC branch
Alternatively, you can speak to our friendly home loan experts on 1300 694 722, or visit an HSBC branch.
Once you have an idea of the kind of property you're looking for, your budget and the right loan for you, it's time to apply. To speed up the process, we recommend you have all your relevant documents handy.
When you've submitted your application, we'll send you conditional approval once we've verified some key facts. Like your income and the property valuation.
4. Property inspections and legal advice
Buying a property is probably the biggest purchase you'll ever make, so it pays to do your research. After all, you don't want to move into your new home then find it's full of white ants or has a wall that's about to collapse.
A building inspection covers the condition of the building and identifies any potential problems. Like cracks and rising damp, structural movement or inadequate plumbing.
Pest inspections include tricky areas under floors or on roofs, to pick up on any termite or woodworm infestations.
While you're sorting out your finances and hunting down the perfect home, it's a good idea to engage a solicitor or conveyancer. They'll take care of the legal side of the purchase. Friends, family, real estate agents and our own HSBC home loan experts can all recommend one.
Fees vary from state to state and it's worth shopping around. The cost will depend on the type of title the property is registered as, and how much time and work is required. Conveyancing can include strata title searches, council building certificates, drainage diagrams and documents from the state traffic authority and water board. It also handles the exchange of contracts once you reach the settlement.
5. Make an offer
Found the perfect place? Then you're ready to make an offer. There are two types – unconditional and conditional. Conditional offers are more common, but you can agree with the vendor which kind you're going to make.
This is an outright offer to buy the property. You should be 100% sure that this is the house or apartment for you, and that you have the finance in place to buy it. Once the vendor has accepted your offer, you are legally obliged to go through with the sale. Unconditional offers are the norm at auctions.
A conditional offer is also a binding contract, provided all your conditions are satisfied. You can only back out if one or more of them is not met.
There are two copies of the contract of sale – one for you and one for the seller. You both sign both copies before the contract is exchanged. This is usually when the deposit is paid.
Paying your deposit
If you are buying at auction, you are required to pay a deposit. If you are buying privately, you are usually required to pay a holding deposit. This can be anywhere between $2,000 and 10% of the purchase price.
We'll arrange an independent valuation of the property you intend to purchase. We'll use this to calculate whether mortgage insurance is required, and what percentage of the value you're borrowing.
6. Finalise your loan
Once the valuation is complete and you've paid your deposit, it's time to finalise your loan documentation. Your HSBC home loans
expert will let you know if any more information is required. When that's done, you will receive our unconditional loan approval.
As part of your loan contract you'll also need to prove you have home (building) insurance for the new property, effective from the date of settlement. You can get an online quote from HSBC Insurance anytime.
We'll then send you a Letter of Offer, which is your loan contract. We recommend you review it with your solicitor or conveyancer. Then, to finalise the loan, you just sign these documents and return them to HSBC. All done.
The date of settlement is the date you take legal ownership of the property. The balance of the purchase prices has to be paid that day. It's usually six weeks (30 days in QLD), but this can be negotiated as part of the contract of sale documentation.
What happens during settlement?
- Your solicitor/conveyancer will prepare and arrange for you to sign a Transfer of Land document. This should be done at least two weeks prior to the settlement date. It will be handed over at settlement to HSBC, and we'll register it at the State/Territory Title's Office on your behalf. That's when the property will be changed over to your name.
- Your solicitor/conveyancer will contact us, the seller's solicitor/conveyancer and any other interested parties to arrange the date, place and time of settlement.
- Your solicitor/conveyancer should advise you one week before the settlement, of the exact date and time of settlement, and the amount of funds you need to provide prior to it (if applicable). This amount is usually required to be paid by bank cheque one day before settlement.
- After settlement, the seller's solicitors will contact the real estate agent who sold you the property, and advise them to hand over the keys to the property to you.
- Your solicitor should contact you and confirm that settlement has taken place. They'll also send you a Statement of Adjustment, to show you how the funds have been disbursed to the parties involved.
Who to tell
Once you're the proud owner of your new home, there are a few organisations to tell that you're on the move:
- Banks and financial institutions
- Computer and software registrations
- Your doctor and dentist
- State and Federal electoral rolls
- Electricity and gas companies
- Your Employer
- Health fund
- Insurance company
- Local council
- Magazine/newspaper subscriptions
- Post office
- Educational institutions
- Superannuation fund
- Tax office
- Telephone and internet service providers
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