How to Secure Funding for Your First Home?

Buying your first can be a complex and mentally trying process for many young Australians. You would want the best property that will suit your lifestyle needs for years to come. The toughest part in the home buying process is financing. Getting the funds for your first home should actually start before you go on to tour display homes.

Like many young Australians, if you are struggling to finance your first home, here is a brief guide for explaining what to do:

Reduce Your Debt

First of all, even before you start looking at houses, you need to sort out your personal finances to qualify for a home loan. Do you have debts, unpaid credit card bills, or any similar issues? To qualify for the best home loan you can get, you need the minimal debt-to-income ratio as much as possible. That means paying off all those credit card bills. Take note of all the debts you owe and make a plan to start paying back. A stable bill payment history is necessary to convince a lender that you can repay the hefty home loan you borrow.

Understand Different Home Loan Options

Home loans are not one thing. These days, new buyers can enjoy the benefits from various types of home loans to choose based on the ability to repay. The main difference between these types of loans is how you the interest is charged. Mainly, there are two options here: variable and fixed rate. Some home loans are offered on an interest only basis. You can choose home investment loans as well. It’s important to research all these before actually shopping for a home loan.

Hire Professional Help

Confused about all the home loan options out there available to new buyers? Then acquire the services of a mortgage broker Frankston to be fully aware of all the options available to you. There will be different types of home loans you may qualify for, as well as grants. A professional can help you better understand your options and then even help with your application.

Calculate What You Can Afford

A mortgage is not a small loan. Once you obtain a home loan, a significant amount of your income would go towards repaying it. Therefore, first time home buyers should first calculate how big a home loan amount they can afford to repay each month. This would require assessing all expenditures against the income. This amount is crucial as lenders would use it to determine your total home loan amount. Remember that if you have other debts, your repayment ability will be significantly reduced, and thus the home loan would be smaller too.

Apply for Your First Home Owner Grant

As a first time home owner, you can enjoy a substantial grant to support your purchase. You should apply for this grant the same time you apply for your home loan. The amount you are granted will vary depending on the state you live in. It’s considerable if you are planning on buying land to construct a home. Some borrowers apply for this grant with the lenders. But it’s best to send it directly to the Revenue Office for quick processing.

Research is the key to making sure you have the right funding for your home. While you search loan options, don’t forget to start saving for a down payment. If you can put down more than 20 percent as the down payment, then your chances of getting approved for the loan would be high.

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