Buying Your First Property? Here Are Some First Home Buyer Tips To Help You.
Need some first home buyer tips? Lets start here! A must for First Home Buyers is to work out a budget. There is not just the loan repayment to think about. There is also property insurance, council and water rates, power and gas, water usage, small repairs. You need to allow for these as well as other potential unexpected costs.
Also, nearly every home needs something done to it. Whether that be a new coat of point or floor coverings, normally something is required to get it to the minimum standard that you want.
How much deposit have you been able to save?
First home buyers will need a minimum deposit of 5% of the purchase price, along with being able to cover purchase and bank fees. Generally, this means you need approximately 10% of your purchase price to cover everything. Any government grants you may be eligible for usually (with some exceptions) do not go towards the required 5% deposit, however they can go towards the purchase or bank costs.
Remember however, if you have less than 20% of your purchase price (and costs) you will pay Lenders Mortgage Insurance (LMI). (see our other blog about Lenders Mortgage Insurance)
Another option you may wish to consider would be asking parents about the possibility of providing a guarantee for your loan which may negate the need for a deposit of paying the need for LMI. (Again, please see our blog on guarantees).
Get your loan Pre-approved.
Just because you believe you can afford a loan, the bank may have other ideas. It is no use looking at properties that lenders won’t give you a loan for. Know your borrowing power. This way you don’t get disappointed in what you can’t do, you just know what you can do.
Combine your other debts.
If you have several small debts or several credit cards, you should combine these into one debt. Whether first home buyers or long time borrowers, lenders do not like you having too many debts. It says to them that maybe you are not very good at managing your money. A personal loan is a good way to potentially reduce the monthly repayments you have on several loans into a smaller repayment on just one loan.
Remember, if you have a credit card with a large limit, it doesn’t matter how much you use. The bank will assume that at any stage you could take the balance up to your limit, therefore the bank will use the limit as your outstanding commitment. As a guide, lenders use 3% of the limit as a monthly repayment amount.
The Home Loan Comparison Co. compares home loans from a much wider variety of banks than most people have time to consider, and we find the loan that suits your goals.
We are experienced, knowledgeable and dedicated to building ongoing relationships to keep on providing personal and valuable service that is rarely experienced when dealing with the banks.