banking Your Home A guide to buying your next home

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1 banking Your Home A guide to buying your next home

2 Your Home A guide to buying your next home As you would already know from past experience, buying a new home is a great achievement both exciting and challenging. The sense of pride and satisfaction you receive when handed the keys whether it s to your first home or your tenth is a moment in your life that you will not soon forget. However, there are processes in place that you must go through before getting to this stage. Your Home A guide to buying your next home is a handy booklet designed to help you better prepare for the process of buying your next home and taking that next step in your life. And if that next step in your life involves improving your current home opposed to buying a new home this booklet guides you through the benefits of refinancing your existing loan. And of course, our qualified lenders are here to discuss your plans and answer any questions you may have about either process. Happy house hunting 2

3 Borrow with Bendigo Bank and benefit the community you live in When you choose to be a Bendigo Bank customer, you not only make a decision that benefits you, you make one that also benefits your community. That s because with every savings or investment account, every home or personal loan, and every product or service we offer, part of our profits go back into the community to support local projects, groups and organisations. It s not a new thing, it s simply who we are and what we believe in. And it s a simple equation. We believe that Bendigo Bank can only be successful if our customers and our communities are successful first. It means that as a customer you not only benefit from a great range of competitive products and the friendly service we re so well known for, you also get a sense of satisfaction knowing your banking is contributing to your local community. 3

4 Thinking of buying your next home? You have been in your current home for a while now, which has served you well. However, your current situation has changed due to internal or external influences bringing you to a point in your life where purchasing a new home is a feasible idea. Your townhouse is getting too small for your growing family? Your family home seems too big since your kids moved out? You are sick of the city and dream of a life in the country? Or you simply feel it s time for a change? No matter what your motivation is, there are many things to consider before taking that next step in your life: Budgeting and eliminating existing debt Choosing a home (size, style, location etc) Choosing and understanding your loan Knowing the costs involved (repayments, rates, insurance etc) Government grant entitlements Planning your move And although you have already been through the process of purchasing a house before, it s a good idea to refresh your memory about the costs involved, including: Home loan application fees Conveyancing Lenders mortgage insurance Stamp duty Registration and title fees Insurance (for both your home and your repayments) Your Bendigo Bank lender can give you a more detailed list of what costs to prepare for. Bendigo Financial Planning With any change to your financial situation, it s worth considering sitting down with one of our qualified financial planners to discuss your financial future. It might be advice on paying off your home loan quicker or strategies on how to best use the equity in your property. Did you know? A Principal Place of Residence (PPR) concession is a discounted rate of stamp duty that applies to land purchased after 1 January 2007 for the purpose of being occupied as your main residence whether the house currently exists on the land or is intended to be built in the future. The applicable discounted rate depends on the value of your dwelling and the date on which the contract to purchase was entered into. Please talk to your solicitor to find out if you are eligible. 14

5 Thinking of refinancing your existing loan? There comes a time when you need to sit back and reassess your current situation. Are you getting the most out of your home loan? Does your home need any improvements? Are there any big purchases you wish to make? Or do you just need a well-earned break? The following situations are examples of how refinancing could benefit you. You find a more suitable home loan The type of home loan that you selected when you purchased your home may have been the ideal choice back then. However, since signing on the dotted line, things may have changed in the financial world or to your current situation that may have affected the suitability of your home loan. A better rate or more flexibility are common reasons why customers are motivated to refinance. If you are chasing a better interest rate, remember that you need to consider the fees and charges that may be applicable to refinancing. The savings you think you may receive with the lower rate may not outweigh the costs involved. You want to improve your current home If you wish to landscape your garden, renovate your kitchen, add an extra bedroom or build a new shed, refinancing your current home loan may be a financially better option than applying for a personal loan or credit card. You could benefit from a better interest rate, and will also minimise the number of loans you have making it easier to keep track of your finances. You wish to make a large purchase They say a change is as good as a holiday, but why be limited to one or the other? With the option to refinance, you could update your current vehicle to a newer model or you could take that trip around Australia you have always wanted or you could do both, depending on your eligibility. You need to organise and simplify your current loans It s not uncommon for somebody to have several loans. You may have an existing home loan that you took out 10 years ago, a personal loan for the car you purchased back in 2009 and a credit card debt for the holiday you took to Bali last year. By consolidating your loans into one, you make it easier to manage what you owe, as well as potentially saving on interest. Whatever your reason, your local Bendigo Bank lender will be able to discuss your options. 5

6 Buying your next home From start to finish Research With a budget in mind, research some properties that suit you and your lifestyle. See your lender Make an appointment with your local Bendigo Bank lender to discuss your home loan options. Once an application for a loan is submitted it is assessed by the bank. You will be notified of the results of this assessment, and if required the bank can provide you with a pre-approval. Conveyance Organise a solicitor/legal representative to handle your conveyance during the property purchasing process. Property valuation Once you ve found the home you re after, Bendigo Bank will arrange to have the property valued as security for your home loan if required. Insurance Once finance is approved, it s time to think about protecting your new financial commitment. Is your house protected prior to settlement? How will you be able to pay off the loan should something unexpected happen? Your Bendigo Bank lender can talk to you about different insurance covers to protect your property and repayments. Go through the property a few times. If you know a builder, take them along with you to do a building and pest inspection. Your solicitor is there to help and guide you through: The sales process and what s involved. The costs that are involved. The finer details such as any clauses in your contract of sale Plan your move With your finance approved, start planning your move to coincide with the settlement date. Prior to settlement Ensure everything is in order (ie removalists, utilities, address changes etc) and ready for your move. Settlement day Your home loan has settled and you can now move into your new home. Have a disciplined plan in place for paying off your loan. And of course, should you have any questions or concerns about your home loan, your Bendigo Bank lender will be more than happy to help. Keep in contact with your solicitor and lender to ensure everything is on track. 6

7 Refinancing your current loan From start to finish 1 2 Assess your current loan and situation Do you feel you could be getting more from your current home loan? Do you wish to access the equity in your property? Do you have too many loans and wish to consolidate? If your answer is yes to any of these questions, it might be time to discuss your options with your local Bendigo Bank lender. See your lender Your lender can evaluate your current financial situation and give you advice on what home loan would suit your needs and the costs involved if you agree to refinance. If satisfied with the lender s advice, you can then submit your application, which will then be assessed by the bank. Check out the Bendigo Bank online calculators to see how paying off extra from your loan can benefit you. 3 Property valuation In order to proceed with the application, your lender will need to organise a valuation of your property. 4 5 Insurance Once finance is approved, it s time to consider or re-evaluate your current insurance cover to ensure your property and payments are fully covered. Settlement day Once your refinanced loan has settled, make sure that your periodical payments are updated to reflect the new repayment amounts if applicable. 7

8 You have been through the process of purchasing a home before. You have experienced the highs and lows of saving and budgeting, choosing the style and location of your home, researching the types of loans on offer and planning the move. However, are you at a stage where you need a change? Do you go through the process again and purchase a new home? Or is it wise to refinance and improve the one you currently own with extensions or renovations? This handy guide can help you with that decision. And of course, should you have any further questions or concerns about purchasing a new home or refinancing an existing loan, your local Bendigo Bank lender will be more than happy to help. For more information on Bendigo Bank home loans visit your nearest Bendigo Bank branch. T 1300 BENDIGO ( ) W Bendigo Home Loans are subject to terms and conditions. Fees and charges apply. Bendigo Bank s lending criteria applies. This booklet contains general information only. We encourage you to seek professional advice when buying a home. You should also read the terms and conditions available from any Bendigo Bank branch or online at before making any decisions. Bendigo and Adelaide Bank Limited, The Bendigo Centre, Bendigo VIC 3550, ABN AFSL/Australian Credit Licence BEN50MB257 (S40565) (05/12)