For most people, a house will be the most important and expensive asset they will ever own. Most first home buyers know this, but not many understand the process of settling the home of their dreams.
After finding the right property, you will need to find the right home loan and get approved. Getting the right advice is essential!
Save a deposit
When setting out to buy your first home, having a large enough deposit should be your first priority. The size of the deposit required will depend on the value of the amount and the property you are borrowing, otherwise known as the loan to value ratio (LVR).
Organize your team
Putting together a team of experts should be done prior to negotiating on the price of the property.
To get the best advice, it’s ideal to have:
– A mortgage broker (that’s us!).
– A conveyancer/solicitor (or a settlement agent in Western Australia).
– Accountant (if you are a property investor).
Because they’re the cheapest, conveyancing costs can range from around $400 all the way to $2000 but it’s important not to choose a conveyancer just.
Most people know friends or family who have bought a house so they can recommend a solicitor for you.
Better still, have a look at our list of recommended conveyancers for each state.
A pre-approval means that your home loan is basically approved subject to the bank accepting the property that you plan to buy. Not every property is accepted by the banks, so take a look at our property types page before you make any offers.
You should aim to get pre-approval six months prior to buying a house!
Whilst the process of conveyancing has been made simpler, you will still be required in the vast majority of instances, to be represented by a property lawyer in order to buy or sell your property. It is possible for a layman to undertake their own conveyancing but it is unlikely that the solicitor or Conveyancer on the other side of the transaction will work with you for a multitude of reasons. Laymen are uninsured so they can not provide the necessary undertakings to repay mortgages and other costs upon completion of the property transaction. Laymen are not bound by the professional rules and regulations under which solicitors and Licensed Conveyancers are governed and regulated; hence solicitors and Conveyancers do not like working with laymen.
Choosing the Correct Property Conveyancer is Vital
It is important that you choose the correct Conveyancer to act on your behalf. The cost of instructing a property lawyer to act on your behalf has become far more competitive over recent years, given the changes at the Land Registry and efficiencies that lawyers have made in speeding up the conveyancing process.
When choosing a property lawyer your choice should not simply be about the cost of the conveyancing service. The actual service that you will be provided with will be of paramount importance. It is vitally important that you are able to contact your Conveyancer over the telephone and by email, and that you have one point of contact within the conveyancing organisation who can provide you with the comfort, advice and support that you need.
Property conveyancing can sometimes be a stressful process as buying a property can inevitably be one of the largest financial transactions that you will make in your lifetime. It is vitally important therefore that you choose the correct Conveyancer to act on your behalf.
In general terms there are two different types of property lawyer that you can choose to conduct your conveyancing transaction. Solicitors are regulated by the Solicitors Regulatory Authority and may undertake other types of work such as matrimonial work or litigation as well as conveyancing. A solicitor in general practice may need to attend at Court and at other appointments which may frustrate communication throughout the conveyancing process.
Licensed Conveyancers are specialist property lawyers who are regulated by the Council for Licensed Conveyancers. All work undertaken by Licensed Conveyancers is office based and hence effective communication should not prove to be a problem.
Licensed Conveyancers Offer Effective Communication
Both Licensed Solicitors and conveyancers operate in various different shapes and sizes. The sole principle acts on his own, with one or two members of staff in support. Multi partner practices often have teams of Conveyancers acting with efficient case management systems, online case tracking and sophisticated communication facilities.
Certain lenders may now insist that they are separately represented in the event that you are securing a mortgage on your property. Lenders such as HSBC currently insist that you instruct their solicitors to act on their behalf in securing the mortgage in their favour. This can lead to almost double the costs of the conveyancing transaction and will invariably delay your property transaction. In the vast majority of instances in England and Wales the lender will let you choose the Conveyancer of your choice, so long as that Conveyancer is on the mortgage lender’s legal panel they will be able to act for both the mortgage lender and yourself throughout the course of your property transaction.
Conveyancing is the legal process for buying and selling a property. Whilst the process of conveyancing has been made simpler, you will still be required in the vast majority of instances, to be represented by a property lawyer in order to buy or sell your property. When selecting a property lawyer your choice should not simply be about the cost of the conveyancing service. In general terms there are two different types of property lawyer that you can select to conduct your conveyancing transaction. In the vast majority of instances in England and Wales the lender will let you choose the Conveyancer of your choice, so long as that Conveyancer is on the mortgage lender’s legal panel they will be able to act for both the mortgage lender and yourself throughout the course of your property transaction.
Divorce is about severing ties and starting over, at the same time. Having a financial plan can help secure your future and give you peace of mind, but this process isn’t without its challenges.
Related: ‘I’m Getting Divorced, and My Spouse Owns Part of My Company’.
“You have to reassess everything,” says chartered financial analyst Robert Stammers, director of investor education for the CFA Institute. “Everything you do is built on a set of future goals, and these change when you get divorced. Your future goals aren’t going to be the same; they’re no longer in connection with someone else.”.
While untangling your marital finances, then, think about how to fund the divorce along with your new life.
As Laura Pilz, financial advisor at Merrill Lynch Wealth Management, says, “One of the fundamental financial planning rules is that oftentimes, when people get divorced, they think they’re entitled to the life they’ve been living. What ‘divorce’ means is that you’ll get a life that’s 50/50. You’re not guaranteed that you’ll maintain the lifestyle that you’ve become accustomed to.”.
Separating emotions from financial decisions makes for smarter choices, too. “Marriage is about love, and divorce is about money,” says Gabrielle Clemens, vice president of investments at UBS Financial Services. “As you go through the process of divorce, everything comes down to the concept of money.”.
To deal with that concept, here are financial planning springwood strategies to consider.
- Review your financials and expenses.
“Many people get divorced and then they deal with the consequences,” says Pilz. “The people who do this most successfully think about their finances before they sign the divorce decree.”.
As you review your financial situation, look at your income sources, expenses, assets and tax situation. While every divorce is different, maintaining two separate households is more expensive than one. “In order for you to know what you have to spend after the divorce, you have to know what you were spending before the divorce,” says Tracy Stewart, a certified public accountant and personal financial specialist in College Station, Texas.
Start by reviewing your past year’s credit card and bank statements. Summarize expenses by category, and create separate columns for Mom, Dad and children. You’ll have a better idea of what you can afford going forward and can decide how to use that money after the divorce once you’ve tallied everything.
As you go through this process, if you’ve got children, be sure you can cover their costs, including potential future expenses like braces, cars, insurance and activities. Remember that this amount can go up as your income increases if child support is a part of your budget.
Related: Love Inc.: Startups Make Breaking Up Easier to Do.
- Budget for alimony.
The length of the marriage, the possibility that one partner didn’t work and for how long and the assets that that spouse will receive as part of the settlement all determine whether alimony is part of the settlement.
“In long-term marriages where someone hasn’t worked for a long period of time, someone might get permanent maintenance, but this doesn’t always mean ‘permanent,’ because people retire or may not be able to work,” says Brian Blitz, a principal at Berger Schatz. Alimony may also end if the recipient cohabits or remarries.
Alimony further impacts both people’s budgets and their tax situation. While nontaxable alimony is paid from after-tax dollars and is tax-free to the receiver, most people receive taxable alimony, which is tax-deductible to the payer and taxable to the receiver.
Those paying taxes on alimony need to budget carefully and pay taxes accordingly– $10,000 per month in alimony, for example, results in a net cash flow of $6,500 to $7,000 per month, depending on the tax bracket and deductions.
Sometimes, your settlement and alimony can be renegotiated, but don’t count on this. If a payer’s income goes down though, “Go back to court and get a reduction. Don’t wait,” says Randy Kessler, founding partner of Kessler & Solomiany. “Most states don’t have a statute of limitations, and you’ll have to pay it. You can’t go off the hook retroactively.”.
Alimony isn’t for forever, though, and recipients have to plan for when these payments will end. “This means you have to get back into the workforce and get training to do this, and get on a budget, so you can save money,” says Blitz.
- Plan your career.
Getting back into the workforce may seem daunting, but there are many benefits. Your salary will help with your financial plan, and your job will help with your self-confidence, happiness and social life; work is a great place to meet new people. “Think about the long-term projections and not being beholden to anyone else,” says Blitz. “All of those things will benefit you.”.
Those who have been out of the workforce for some time may need education or training to obtain marketable skills. “During the divorce, you should be thinking in terms of what you need to do to get a career,” says Stewart. “If you need a degree or training, you negotiate during the divorce for your spouse to pay for this. Often, in a collaborative divorce, your partner will want to see that you can make ends meet; and if you ask for help paying for your education or training, your partner may offer to help, but you have to ask.”.
Research the training you’ll need first, along with the cost for any tuition, books, parking, lab fees, printers or computers, as well as the duration for how long it will take.
- Consider downsizing your home.
People try not to disrupt their children’s lives after a divorce, by continuing to live in the family home. “That’s often the beginning of a very difficult situation because it costs a lot of money and the house is not liquid,” says Pilz.
Moving can be an emotional decision, but your family home is also an investment asset that’s part of your portfolio. Since you’ll have to pay for this home with one income, if your budget’s tight, moving to a less expensive home or renting may be a good option to consider. Factor into your decision how much utility the home provides you.
“If your home is a huge portion of your wealth, it might make sense to diversify your assets,” says Stammers. “You need to approach it as an investment asset, and you need to make decisions from that context as well.”.
- Don’t forget health insurance.
Health insurance could be a substantial expense if you used to be on your spouse’s policy. COBRA is an option but an expensive one, and it lasts for only 36 months. So begin to look for your own policy even before you’re divorced. “Part of the reason to work again is to help pay for your health benefits,” says Clemens.
Working again will also help bring in the income, professional connections and self-confidence you’ll need after a divorce, hopefully convincing you that there is, indeed, life and financial well-being, even after a divorce.
As Laura Pilz, financial advisor at Merrill Lynch Wealth Management, says, “One of the fundamental financial planning rules is that oftentimes, when people get divorced, they think they’re entitled to the life they’ve been living. What ‘divorce’ means is that you’ll get a life that’s 50/50. “Marriage is about love, and divorce is about money,” says Gabrielle Clemens, vice president of investments at UBS Financial Services. “In order for you to know what you have to spend after the divorce, you have to know what you were spending before the divorce,” says Tracy Stewart, a certified public accountant and personal financial specialist in College Station, Texas.
“During the divorce, you should be thinking in terms of what you need to do to get a career,” says Stewart.