What loan is best for me?

Before you start looking in the Saturday papers for your dream house or apartment, the first thing you should do is decide if being a home owner makes financial sense for you. With owning property comes responsibility and with a mortgage comes financial commitment lasting many years.

But, if you are like most Australians, owning your home is all part of the dream. Your own home can give you security, peace of mind and a safe place to raise a family. When you own your own home, you also have greater freedom to express your personality and you don't have to face the annoyance of rent inspections.

Perhaps best of all, owning your own home means that you are building a financial wealth.

How much can I borrow?

So you've decided to take the plunge and join the legion of home owners. The first step you need to take is to work out how much you can borrow. This will give you an idea of the type of home and location you can afford to buy.

Contact a Mortgage Store broker to get an estimate on your potential borrowing power.

How much can you afford?

It is generally advised that your monthly mortgage repayments should not be more than 35% of your gross income. This allows you enough cash to fund your lifestyle. Read more about how much you can afford here.

Can I borrow 100%?

With increased competitiveness in the Australian mortgage market, it is now possible to borrow up to 95% and in some cases 100% of a the cost of a property. However, if you plan on borrow more than 80% of the value of the property, it is likely you could be required to take out mortgage insurance which is another cost of the loan. A good mortgage broker will help you to assess the best loan option if you do need to borrow more than 80%.

Additional costs

It is important to remember that the advertised price of your dream home isn't the only cost. As we've already mentioned, you may need to pay mortgage insurance. Then there are other fees such as solicitor's fees, bank application fees, building inspections, property valuations and varying levels of stamp duties depending on where you are buying.

These can all add up very quickly - so make sure you speak to both your agent and mortgage broker to budget for these extra expenses in your loan application.

First-home buyers grant

If this is your first home purchase, you may be eligible for the Federal Government's $7000 first home buyers grant. Your mortgage broker will help you with the necessary paper work to apply for the grant.

Where to get your loan from

There are more than 3000 different home loans available in Australia, offered by banks, building societies, credit unions and other non-bank lenders. That is a lot of choice and without the experience and knowledge you could end up paying to much for your mortgage - or even worse, be refused a loan all together. It pays to get the right loan for you.

A Mortgage Broker will help you make an informed decision by reviewing your personal circumstances and then match that information against the many lenders and products they have access to. Additionally, mortgage brokers are experts in non-conforming loans whereby because you may not have a traditional borrower profile, your bank has refused your loan application.

Contact a mortgage broker to get started with free advice.
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Low Doc Home Loans
Home Loans for the Self-employed.
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A line of credit that works like an ordinary credit card.
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