Choosing to buy your own home is a big step and could very well be the most costly decision you will ever make. While there are many people in Australia who are fortunate enough to have the funds to purchase a home outright, there are also many who may need to apply for a mortgage to be able to. Since this involves borrowing a sizeable amount and having to make instalment repayments for several years, it is wise to closely consider the available options when seeking a home mortgage. You should be cautious with credit deals.
There are various types of home loans available on the market, both online and offline. All of these, however, fall into one of two classifications: bank and non-bank loans. Examples of non-bank loans are those from building societies, credit unions and mortgage originators. Both bank and non-bank loans share common features such as the following:
- You need to go through an application process, much of which can be done online, which will require you to show your ability to repay the amount to be borrowed. If you are going to submit documents not written in English, then you must get them professionally translated. (See aussietranslations.com.au, for example.)
- The home to be purchased will serve as the loan’s security.
- An amount for deposit usually has to be provided, though recent offers allow for low deposit, or even no deposit at all.
Given the danger of losing your house when you fail to make the repayments, and to allow for smooth processing of your home loan, it is vital to be sure you can afford all the costs before taking the loan. This includes legal fees, stamp duty, repairs, water rates and insurance. It is also critical to consider the interest rates and the monthly loan instalments.
First-time home buyers could be eligible to get some savings from government-offered schemes such as the First Home Saver Account and the Australian government’s First Home Owner Grant, with websites at homesaver.treasury.gov.au and firsthome.gov.au respectively.
Lending options abound, and it is necessary to find one that suits your circumstances, needs and capability. Credit providers will normally allow you to be the one to find the house that will fit your budget range. Interest rates are significant in the determination of the monthly repayments. The common choices available to borrowers are fixed, variable, partially-fixed and introductory interest rates.
To learn more about how to apply for a home mortgage in Australia, you can check the following informative and trusted government websites: