A few home truths when purchasing

Buying your first property can be exciting but also quite daunting.

THINK AHEAD: Buying a property is likely to be one of the biggest financial commitments most people will make in their life. Picture: LUKAS COCH

ENTERING the property market can be very exciting, but it can also be quite daunting.

Buying a property is likely to be one of the biggest financial commitments you make in your life and whether you're a first-time buyer or experienced investor, it's a decision that requires saving, planning, research and, of course, a reliable budget.

Saving for a deposit is the first step in purchasing a property and a workable budget is integral during this process. A realistic budget will help you understand your limitations and identify how much you can afford to spend on a property.

When setting a budget, remember to factor in all the additional costs that come after buying a property, such as insurances, repairs, maintenance, body corporate fees and rates.

Whether you're a first-time or fourth-time buyer, you should discuss your financial profile with your financial institution or mortgage broker to gain a further understanding of how much you can afford to borrow and repay.

Many investors, especially young or new investors, use rental income to support their loan repayments.

It's important for investors to consider that if for whatever reason they stopped receiving regular rental payments for their investment property for a certain period, could they continue to service their loan?

There has also been a recent shift in interest rates for investor loans, so it's equally important for investors to consider potential rate changes when calculating their budget. A 1% interest rate rise from 5-6% on a variable $300,000 investor loan could cost some investors nearly $100 per fortnight more in repayments.

Also, remember that what's important in a property and its location will vary between buyers. Investors, first home buyers and those downsizing will all have different criteria for what they're looking for in a property and community facilities.

Make sure you research the suburbs you're interested in to get an understanding of what properties are available, the suburb median pricing and nearby facilities.

Finally, once you become a property owner, it's important to remain engaged with your financial profile and seek additional support and information in regards to your individual situation if you need it.

For all your banking needs, visit your nearest Suncorp Bank branch or phone 131175.

- Suncorp Bank's Lynne Sutherland, executive general manager of stores and speciality banking

Originally published as A few home truths when purchasing