"First Home Buyers" Seeking Home Loan Information

Nov. 18, 2014 - PRLog -- Buying your first home at any stage of life can be an overwhelming and daunting experience. The key to making home ownership a reality is to have complete information about home finance. It is important to start with your deposit. Most lenders/credit providers will require you to have a genuine savings deposit of at least five percent of the purchase price plus upfront costs. So, it is better to plan for deposits in advance.

What should be the Deposit Strategy Plan?

If you want to bring your dreams of home ownership to reality, you will need to scrape together a deposit. The first step to saving for a deposit is to do some homework and develop a deposit strategy plan for yourself as you may be expected to pay between 5-20% of your property's value as a deposit.

How to create a Budget?

Your plan should also involve creating a "Budget" to work out:

>> How much can you afford to borrow?

>> What amount can you afford to make in monthly repayments?

When creating your "Budget", you need to determine your current financial situation and your cash flow. These include the following factors:

>> Adding up everything you earn in a month, then

>> Subtracting everything you spend such as credit card payments, personal loan payments, food, petrol, utility bills, school and education fees, gym membership, etc.

The difference between the total amount that you earn and the total amount that you spend will be the amount you can afford to make in monthly payments.

What Costs are to be incurred while buying a Home?

As with any purchases, there are always some costs in buying a home. And to help you understand what the costs are, here, is a list of the costs and factors you should consider when buying your dream home:

Loan Application Fee - This standard, upfront establishment fees usually covers the costs of preparing your loan documentation and one standard valuation fee.

Lenders Mortgage Insurance (LMI) Premium - If you are considering borrowing up to 80% of your property's value, lenders/credit providers will often require you to take out LMI. This insurance will protect the lenders/credit providers in case you default on your loan. You can choose to pay a one-off LMI premium or you can have the LMI premium added to your loan amount.

Government Fees - This fee includes Stamp Duty and Land Transfer fees, etc. The purchase price (value) of your property will determine the amount of fee payable.

Home/Building and Contents Insurance - Most lenders/credit providers will require you to have home/building insurance as part of their home loan arrangements. You should also consider that Home/Building Insurance and Contents Insurance can be bundled together by insurers as "Home and Contents Insurance" package.

Legal/Conveyancing - You will need to appoint a Conveyancing specialist or solicitor to assist you in complete the purchase of your property. If you do not have a conveyancer or solicitor, you can ask your finance broker or real estate agent to recommend someone.

Inspection Fees - To ensure your new home does not have any nasty surprises (i.e. termites or structural damage), you should get a Building Inspection and Pest Inspection done on the property you are buying.

What Benefits do First-Time Home Buyers receive?

If you are a first-time home buyer, you may be entitled to the Federal Government's First Home Owner Grant (FHOG) scheme to assist you when you are:

>> Purchasing a newly built home

>> Constructing a new home, or

>> Purchasing a property "Off-the-Plan"

Depending on which state or territory you live in, you may also be entitled to Stamp Duty rebates or exemptions.

Truly, a first-time home buyer benefits from the schemes and exemptions offered by the government. Take advantage of the benefits today. Don't wait anymore. You have complete information of obtaining your first home loan. All the best for buying your dream home!

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