When you're ready to take the leap into buying a home, thorough property research can make the difference between a sound investment and a costly mistake. As Defence Force members, you have access to unique Home Loan options and benefits, but that doesn't mean you should skip the groundwork.
Let's talk about the property research mistakes that could impact your financial situation and how to avoid them.
Understanding Your Borrowing Capacity First
Before you fall in love with a property, you need to know what you can actually afford. Many Defence Force members make the mistake of house hunting without understanding their borrowing capacity.
Your borrowing capacity depends on several factors:
• Your income and employment history
• Existing debts and expenses
• The loan amount you're seeking
• Your deposit size and loan to value ratio (LVR)
Mortgage Brokers who specialise in Defence Force lending can help you calculate home loan repayments and determine realistic price ranges. This prevents you from wasting time on properties outside your budget or missing out on Home Loan pre-approval opportunities.
Researching the Right Property Market Areas
The property market varies significantly across different suburbs and regions. Some Defence Force members focus only on properties near their current base, forgetting they might be posted elsewhere in the future.
Consider these factors when researching locations:
• Proximity to Defence bases and facilities
• Public transport links
• School zones and local amenities
• Historical price growth and market trends
• Rental demand if you need to lease the property during postings
Remember, you have access Home Loan options from banks and lenders across Australia, so don't limit yourself geographically without good reason.
Getting Your Financial Documentation Ready
The application process for any home loan requires extensive paperwork. Defence Force members often have unique income structures, including allowances and benefits that civilian lenders might not understand.
Prepare these documents early:
• Recent pay slips showing base salary and allowances
• Banks statements for all accounts
• Tax returns and group certificates
• Details of any existing loans or credit commitments
• Information about your service history and posting arrangements
A streamlined application process starts with having your paperwork organised before you find the right property.
Understanding Interest Rate Options and LMI Benefits
Defence Force members often qualify for interest rate discounts and reduced lenders mortgage insurance (LMI) requirements. However, many don't research these benefits thoroughly enough.
You'll need to understand:
• The difference between variable interest rate and fixed interest rate options
• How variable home loan rates might change over time
• Whether a fixed interest rate home loan suits your circumstances
• Special LMI concessions available to Defence Force members
• How an offset account could reduce your home loan interest rate costs
Different lenders offer varying Home Loan Rates and benefits to Defence Force members, so comprehensive research pays off.
Timing Your Property Purchase and Application
Rushing into a property purchase without proper timing can cost you thousands. This includes both market timing and personal readiness.
Consider these timing factors:
• Your posting schedule and potential relocations
• Stamp duty concessions available in different states
• Whether you should get pre-approved before house hunting
• Market conditions in your target area
• Your career progression and income stability
Getting pre-approved for your Home Loan application gives you confidence when making offers and shows sellers you're a serious buyer.
Making the Most of Your Home Equity Potential
As a property owner, understanding home equity becomes important for future financial planning. The property you choose now could become the foundation for building wealth throughout your Defence career.
Research properties that offer:
• Strong potential for capital growth
• Good rental yields if you need tenants during postings
• Low maintenance requirements
• Appeal to a broad range of future buyers
Your property research should consider both immediate housing needs and long-term investment potential.
When applying for a home loan as a Defence Force member, you're not just buying a house – you're making a strategic financial decision. Taking time for thorough property research, understanding your Home Loan options, and working with specialists who understand Defence Force circumstances sets you up for success.
Call one of our team or book an appointment at a time that works for you to discuss your property research and Home Loan needs.
