Certainly, buying a home is considered one of the significant financial investments in Australia. To buy a home, a sizeable home loan in Australia is usually preferred, in which the repayments are distributed out for many years.
Thus, while understanding the home loan option for you, it is important to invest plenty of time to get the best deal.
Let’s have a look at the home loan process:
First, find a suitable home
Indeed, inspecting properties is an exciting task. However, when it comes to chasing your dream house, you need to consider many things. Before you shop around for your dream house in Australia, have a realistic picture. Figure out that what amount of the home price is affordable for you that you can borrow.
After you have found a suitable home, it’s time to explore various home loan options. There are numerous home loan options available, you can choose any of the options that best suited you according to individual circumstances, lenders, credit provider, and bank.
Here we have run down some of the home loan options for you –
In the variable rate home loan, the repayments go up and down according to the Reserve Bank of Australia notice. The benefit of choosing variable rate is that borrower can repay the additional repayment in any of the months in which the interest rates fall. This will ultimately decrease the loan duration.
In the fixed rate home loan, the interest rate remains the same for all the repayments. Furthermore, you would not be able to make the extra repayments at any time.
Usually, all the home loan process includes –
In the application processing, you need to illustrate the bank or lender that you have a valid source of income and you are able to make the repayments on time.
You need to have enough cash in hand to deposit a percentage of the total home value. It is usually paid upfront of the loan to secure it. If you don’t have enough cash in hand, you can find out Collateral for a loan
Your home loan is secured by the property (home). In case, you fail to do loan repayments on time, your lenders, or banks can sell your home. They have legal rights to get back their investments even by selling your home if required.
Now, have a glance at the 4 questions to ask before going for home loans –
Is it beneficial to deposit more?
Yes, it is beneficial to make a large deposit initially. By depositing a large amount, you would have a lesser amount left to borrow. Ultimately, you have to do lower repayments.
What are the benefits for first time home buyers?
You can go for the First Home Owner Grant Scheme in which you could get the benefits such as one-off payment if you are eligible. You can also choose to invest in the first home saver account which would give you tax concession benefit.
How can you calculate the affordable amount to repay?
You can use home loan calculator online to get the estimate of the repayments. Furthermore, you can also choose to visit the bank manager directly. You should always set the affordable repayment amount of the loan.
Do you have to pay any additional cost?
You need to confirm with the lender about all the additional costs. You may have to pay up-front costs that include the legal fees, stamp duty, ongoing costs, and insurance rates.
Getting a Home Loan in Australia is not a daunting process. However, make sure that the home loan process does not become a cause of stress for you. Take help of a mortgage broker to make the whole loan process fast and hassle-free.