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Pre-settlement inspection checklist: A step-by-step guide

Easy-to-follow budgeting tips for first-home buyers

Some questions to ask your mortgage lender

Set the inspection date: The pre-settlement inspection date has to be made in advance of taking ownership of the property on a day and time that suits both you and the current owner or their agent. It’s usually around one week before settlement is due. Bring someone with you: It’s always good to have a witness or a second opinion on hand, maybe your agent or another property professional like a buyer’s agent, to help you check that everything is in order. They will know exactly what to look for and won’t be too embarrassed to ask tricky questions. And make sure to take photos on your phone of anything you feel is a problem. Take the contract: This will list all the inclusions and the items it’s been agreed the vendor will take away. Tick things off the list in a methodical way. The vendor, for instance, might have decided to leave the washing machine and wall-mounted dryer and blinds, but you might be surprised to find the carpet you liked so much was actually a rug and is no longer there. One new owner agreed to do their pre-settlement inspection at night, only to discover the seller had taken out all the lightbulbs, so it was impossible to perform properly. Have the pre-purchase building, pest and strata reports on hand: You should compare these with how you see the property pre-settlement to make sure nothing has changed in the interim. Any signs, for instance, that a pest problem or any leaks previously noted have become worse should be immediately communicated to the agent and your solicitor.

Trying to break into the market? It can be equal parts daunting and exciting to prepare to dip your toe into the world of home ownership. Recent reports have found that Australia’s average house deposit is around $120,000 (bearing in mind that the typical first-home buyer’s deposit is between 5 per cent and 20 per cent of the property’s purchase price). It’s no small figure, and it indicates that saving a deposit is often the biggest hurdle faced by aspiring home owners. The latest Domain First-Home Buyer Report, released in February, found that the average time for an Australian couple aged 25-34 to save the 20 per cent deposit required for an entry-priced house is now six years and eight months in Sydney and five years and five months in Melbourne. (Darwin will hasten your entry, with just three years and seven months required.) Just like saving for retirement, squirrelling away money for your first home deposit is a rite of passage. While it might seem difficult at first, with practice, it can become second nature. Remember: it’s short-term pain for long-term gain. And as this guide will demonstrate, there are practical budgeting tips and tricks that can help speed up the process and get you on the property ladder faster.

1. How much can I borrow? It sounds simple, but the answer can vary significantly between lenders, which each have their own lending criteria in place. Most lenders have tightened up their home-loan lending rules in recent years amid a tougher economy, which means there could be a hit to your borrowing capacity. It’s worth starting with your needs, and your lender will be able to tailor options based on different products and home-loan features. “If flexibility is important to you, you may choose a variable rate home loan, which you can prepay more quickly, redraw prepaid amounts as required, and even link the loan to an offset account to help you save on interest,” says Dr Michael Baumann, executive general manager home buying at Commonwealth Bank. Sometimes a lender will let you borrow much more than you can comfortably repay, while other lenders may be unwilling to lend you much at all. A very quick calculation is to look at your annual income, calculate 30 per cent of that figure, and divide that by 12 to get a monthly repayment amount. 2. What is the current interest rate? Above all else, make sure you understand the interest rate specific to the lender you’re considering signing up with, advises Atelier Wealth mortgage broker and director Bernadette Christie-David. 3. What other fees should I be aware of? You want to get a clear breakdown of the bank’s fees, including settlement costs, legal fees and annual fees for your loan, which come out when your loan settles. Each lender will have their own fee breakdown, so ask for a copy of this to take away and compare with other lenders, so you clearly understand what they cover. It’s also good to ask about the discharge fees, which some lenders charge when you end the loan contract.