Buying your first home
Tuesday, 16 August 2016 10:45
Bessie Hassan from finder.com.au helps take the stress out of the first home buying process and talks through the steps to getting your first home and how you can get into the market sooner.
|How much does my deposit need to be?|
|The first step is getting a deposit which can be the most challenging part. If you have a deposit of at least 20% of the purchase price, this could help you avoid paying Lender’s Mortgage Insurance.|
|What is Lender's Mortgage Insurance?|
Lenders Mortgage Insurance is generally a one-off insurance payment, but it may be funded under the loan also. This insurance protects your lender against a potential default on your home loan. Often, lenders mortgage insurance is required to be paid when the Loan to Value Ratio (LVR) is 80% or more. To muster up the funds for a deposit, be diligent with your money. You may wish to consider parking your savings in a high interest savings account and trying to minimise your debt. Check out IMB’s savings accounts.
|How much can I borrow?|
Next, work out how much you can borrow. You can sit down with a lender to understand your borrowing capacity and forecast what your repayments may be or check out the super useful IMB Bank Borrowing Power Calculator.
Note: You also need to understand the other costs of purchasing and maintaining a home. In addition to your deposit, you should budget for any upfront costs such as stamp duty, establishment fees on your loan, as well as ongoing costs such as property maintenance and loan repayments. Jump on your state government websites to see if any first home owners grants or concessions may be available to you.
|How can I get into the market sooner?|
|Research is the key to getting a home sooner. Create a suburb and property checklist so that you have criteria to guide your decisions. This could help you rule out properties that don’t suit your lifestyle or budget. For example, you may want to buy in an area that’s close to transport and public amenities, or in a particular school zone. This could help you rule out properties that don’t suit your lifestyle or budget. Consider getting pre-approval on your loan so you are ready to go when you find your dream property. And be realistic because the home buying journey could be time-consuming so you need to be realistic and patient. Do your homework and due diligence and surround yourself with experts to guide you along the way. Be realistic because the home buying journey can be time-consuming. Do your homework and due diligence and surround yourself with experts to guide you along the way.|