Will The Bank Lend Me Money?
Perhaps the most important thing you can do when preparing to seek out what home loans Australia might have waiting for you is to consider your current financial situation. What is your budget? How much can you put towards a mortgage? These questions will help you determine what borrowing capacity you might have, as well as which home loan options are going to be open to you. To find out if you qualify, be sure to follow the steps.
1. Draw Up Your Budget
Preparing your budget can be as simple as sitting down with your spouse or partner and determining what the \”ins and outs\” of your money flow currently is. Write a list of all of your income for each month, and then scour through your bank account to determine what all your monthly expenses tend to be.
Doing so will help give you a better idea of any leftover cash you have to work with. Keep in mind that some wiggle room should be accounted for in your expenses column, as unexpected events might require extra expenses from month to month. It\’s also a good idea to calculate the possibility of interest rate changes or loan processing fees into your budget, giving you a buffer that will more closely match reality as you apply for a home loan as a first-time buyer. Our in-house finance team at WOW Homes will help you secure the best value home loan and if eligible, government assistance as well. A deposit of $1,500 is all it takes to get started.
2. Calculate Your Borrowing Capacity
How do you know how much money you are eligible to borrow? Even institutions offering the best home loans must look at certain criteria to see how much they feel comfortable lending to an individual. Outside of your basic application, your lender will likely take a close look at the following items to determine if you fit their lending criteria:
- Your current employment status and salary schedule
- Outstanding personal debts, including credit card limits
- Previous loan history, including cars, etc.
- The value of the property you are looking to purchase
Once the lending criteria are approved, you will be able to determine the amount of money you are eligible for, as well as the type of deposit required from you as the loan goes into effect.
What Kinds of Loans Can You Qualify For?
Luckily, first-time home buyers in Australia may be eligible for special loans or grants, giving them a leg up in getting into the market. The in-house finance team at WOW Homes offers a variety of options to suit first home buyers including the listed home loans. By taking advantage of these home loans Australia buyers can receive benefits such as greater borrowing capacity, reduced fees on stamp duty, low-deposit home loans, and additional cash to make their home dreams come true. Here are some options to consider:
- Keystart Home Loans – An initiative of the State Government, Keystart loans help Western Australians get into affordable housing through low deposit home loans. No mortgage insurance is required, and specific assistance may be available for individuals with disabilities and those who are sole parents, as well as Aboriginal borrowers.
- First Home Owners Grant (FHOG) – Another government initiative, the FHOG works to help first-time borrowers offset the cost of stamp duty and other costs involved with a home loan. There is some eligibility required for this grant, and it differs by state. However, the chance to incur no insurance duty, receive additional aid and an exemption from stamp duty makes this grant an attractive option for many.
- Guarantor Home Loan – If you have a family member (such as a parent) who can offer a property they either own or in which they have equity as security, a guarantor home loan may allow you to borrow up to 107 % of the price of the home while avoiding the need for a deposit. As the property increases in value or you are able to pay off an approved portion of the loan, the guarantee may be removed.
Outside of these major opportunities, individual banks or lenders often extend special options to first-time home buyers. In your search for the right home loan, be sure to ask your lender if there are any programmes that might fit your needs.
How Can You Compare Options?
The most important thing you can do is to conduct your own research into the best home loans available to you. It is never a good idea to say \”yes\” to the first bank or lender that offers you money. Instead, make a wise decision by consulting WOW Homes in-house finance team to help you through the application process. In addition, make a list of Pros and Cons for each opportunity, listing common elements that can be easily compared, including:
- Specific lending criteria
- Deposit amount required
- Interest rates
- Type of rate (fixed or variable)
Looking at these criteria from option to option can help you narrow down your choices, and help you define what is most important to you in this endeavour. You may wish to seek out low deposit or no deposit home loans, or options that allow a family member to provide the \”gift\” needed to make the required deposit on the loan. It may also help to find loan options that are flexible enough to accommodate unforeseen issues, such as sudden illness, loss of income, etc.
How Can You Move Forward?
Once you\’ve made your decision, moving forward can be as simple as gathering the appropriate documentation to prove that you meet the lender\’s criteria, filling out the needed application form, and getting in contact with the friendly WOW Homes House & Land Specialists for more information.
It\’s also the perfect time to let go of any extra expenses that won\’t help you achieve your objective. Cut out unnecessary items from your budget, and hold onto any extra cash that comes your way. Soon enough, you\’ll be ready to sign the papers and get moving on making your home dreams become a reality.