Page 54 - Smart Money

Chapter 2

charge you penalties. That is another reason it is important to make sure
that things go smoothly, because it could cost you money.

Unless you are paying cash and have the money in the bank, the contract
is always subject to finance, and it is generally 28 days. If the real estate
agent wants confirmation that you have actually put a pre-approval in to
the bank, then you should give them your mortgage broker’s details.

Approval

If you are a first home buyer, we need to send off your First Home Buyer
Grant application form and make sure that is processed and approved,
and generally, that is when the pest inspection is done. Then the loan
documents are issued to you and the mortgage broker will help sign
you up. Alternatively, you can go into the branch and the staff will help
you sign your mortgage documents and send them off. It is imperative
that you get the documents done quickly and send them back as soon as
possible.

You must also organise insurance for the property – building insurance –
and send that to the bank. The mortgage broker will follow this up. You’ll
also have settlement documents that need to be signed and sent back to
the settlement agent. Once all the paperwork is signed for the settlement
and the mortgage, and you have insurance, then the settlement agent will
liaise with the bank to book settlement. Once settlement occurs, your
repayments will start weekly, fortnightly or monthly after the settlement
date.

Once you start making repayments, make sure they are on time. Get
used to having your mortgage repayment there instead of paying rent,
which is normally higher. You should try to put extra money into your
mortgage, whether it is an extra $10 or $20 dollars a week or a month,
any extra cash. If you put that straight into your mortgage, with most
banks, you can access it as a redraw on their mortgage. Then, if you do
get into financial hardship, you have the extra money you paid into your
mortgage to guard against late payments.

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