First Home Loan


First Home Loan Tips
Overcoming The Major Obstacles
first-home-loan-baulkham-hills-nswWhen you’re looking at buying your first home it’s easy to feel overwhelmed by the many options when trying to choose your first home loan, but our tips for finding that right first home loan can help.

Potentially when you’re buying your first home the major hurdle for many will be in making that initial commitment. Sitting around and talking about your dreams and desires will never make them happen. Taking out pen and paper and writing down what you want and a plan on how to get there will help in bringing those dreams and desires one step closer. Also, setting a realistic achievable time line will also help you keep the goal of buying your first home alive.

Saving for a home loan deposit toward the down payment in order to qualify for your first home loan can at times look as far away as a trip to Mars. For a lot of younger newlyweds covering the cost of that recent wedding and right after having to establish a home base can often whittle away any savings they may have managed to put together towards their home loan deposit.

Are You Afraid Of Commitment?
Making a commitment is the first step to fulfilling the dream of buying your first home. Saving the deposit toward buying your firstQuestion mark in front of house and dollar sign home will take planning, good research and serious dedication to staying within your household budget.

You may want to seek out the services of an experienced professional mortgage broker when buying your first home as they can help assess the best loan for you out of the hundreds available. They will also calculate how much savings you will require to complete a property transaction. Frequently a first home buyer might think they only need the 5% deposit to get started. However there can be other fees and charges that may need to be included.

Interest rates are at an all time low in Australia and there are many financial professionals urging first home buyers to come forward and apply for the first home owners grant (FHOG). These grants and often times the concessions that go with them not only help toward a home loan purchase the extra cash can also be very useful for any extra fees required when settling the mortgage.

Finding The Right Answers To The Questions
Couple sitting on floor amongst moving boxesIn the meantime while your savings for a home loan deposit are growing you can set about and be actively seeking out the answers to any number of questions that will probably arise. Start by researching just how much you can borrow for your first home loan based on your current income and repayment capabilities. There’s possibly a first home buyers grant (FHOG) available for new homes in your state if you’re buying your first home that can be added toward the savings for your home loan deposit you are trying to accumulate.

Buying Your First Home – State Grant Reference Websites:
Following are links for each State and Territory in Australia that can be explored for more information about grants towards buying your first home.
First Home Owners Grant NSW (FHOG NSW)
First Home Owners Grant Qld (FHOG QLD)
First Home Buyers Grant Vic (FHOG VIC)
First Home Owners Grant SA (FHOG SA)
First Home Buyers Grant Tas (FHOG TAS)
First Home Buyers Grant NT (FHOG NT)
First Home Buyers Grant ACT (FHOG ACT)
First Home Buyers Grant Western Australia (FHOG WA)/First Home Buyers Perth
Don’t Expect That Which You Don’t Inspect
Couple asking, what is the LVR for my loanWhen considering buying your first home and looking to qualify for your first home loan it’s important to do some initial research on how to go about getting that first loan.

First home buyers who are considering looking at low deposit home loans should do their calculations carefully as there are a few issues many first home buyers are not always aware of
.
The minimum deposit first home buyers need to show most main stream lenders is 5%. This has to be in the way of what is known as ‘Genuine Savings’. This means you show the lender that you have had that money in a bank account in your name for at least 3 months, or you have saved that amount over 3 months, evidenced by showing them bank statements.

There are some exceptions to the above policy and if you’re interested contact your best mortgage broker to find out about the alternative options.

What Happens If I’m Not Eligible For The FHOG?
Nonetheless, for a first home buyer who may not be eligible for a Government First Home Owners Grant and has a minimum deposit this could be problematic. That’s because lenders will only lend up to 97% of the value of the property being purchased including any additional fees and charges such as Lenders Mortgage Insurance (LMI).

When buying your first home on any deposit of less than 20% the loan is going to incur what is known as Lenders Mortgage Insurance (LMI). What is lenders mortgage insurance? LMI is a risk insurance that you pay for on the banks behalf that is taken out with a Mortgage Insurance company that covers the lender in the event you default on the loan and they have to repossess the property.

Home buyers buying their first home with a low home loan deposit need to be aware that LMI can get quite pricey when your deposit is low. Although many lenders will allow you to add on the LMI to the amount you’re borrowing, they won’t allow the loan amount to go beyond 97% of the value of the property.

As LMI can get quite pricey on low deposit home loans this extra fee has to be provided for from somewhere. In most instances borrowers capitalise the fee onto their loan up to the 97% limit. That being said, because of the amount being charged for the LMI fee it will reduce the amount the lender will loan towards the actual property purchase.

How Much Money Will I Really Need?
Loan application form stamped approvedAs a rule of thumb it means the loan amount will end up as 92% of the purchase price. In turn this means that the first home buyer who’s purchasing an established property that’s not eligible for a FHOG will need an 8% deposit and also sufficient additional funds to cover things like State Purchase Stamp Duty and conveyancing costs.

If you’re in the market for buying your first home and need assistance with your first home loan, then good home loan advice is to seek out the best mortgage broker you can find, as they will be able to quickly advise you on what’s needed and what you need to do in the way of successfully applying for that first home loan.

Mortgage broker services are free as the banks pay their commissions and a good one will work with a buyer on their first home loan even though it may take an extended period to resolve all of the buyer’s issues.

Mortgage Brokers Will Save You Time And Money

Find out how to get pre approved for your home loan

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