After deciding you want to buy a home, the next step is usually to apply for a home loan. But with financing rules becoming stricter, this can be a daunting task (especially if you’re new to the property market).
Before you commit to such a big financial decision, here are four frequently asked questions to help you determine which loan is right for you.
How much money can I borrow?
The amount of money you can borrow from a lender will be completely dependent on your current finances. If anyone else is applying for the loan with you, the lender will also take their financial situation into account.
A lender will ask you many questions as part of the home loan application process. These questions will involve your current income, your employment status, your credit history and any outstanding debts you may have. For an idea of your potential borrowing power, try using our online calculator.
What’s the difference between a variable rate home loan and a fixed rate loan?
A variable rate home loan is one with an interest rate that changes over time. It may rise or fall depending on market interest rates or business decisions made by your lender. A fixed loan on the other hand has a set interest rate for anywhere up to five years.
The biggest benefit of a variable loan is flexibility, as you have the freedom to pay more than your minimum monthly repayment. This means that you can pay off your loan faster and ultimately pay less interest.
However, not having a fixed minimum repayment amount gives you less certainty, and this can be stressful if you’re on a strict budget.
How much will my repayments be?
Before you decide on a home loan, it’s important to know that you can afford it. Home loan repayments can take a big chunk of your income costly, especially when they are combined with your current living expenses.
By using our loan repayments calculator, you can estimate how much your repayments will be each week and see how they align with your current living costs. This will narrow your property search and give you an idea of how much you need to budget.
Can I get the First Home Owners’ Grant?
The First Home Owners Grant is a lump payment of $10,000 to help first-time buyers. In accordance with the Government’s eligibility criteria, you and anyone else you’re purchasing with must never have owned a property in Australia before. The home needs to be new and worth less than $750,000.
How we can help
Taking out a home loan can be confusing. There’s a huge range of lenders and products to choose from.
Our experienced and licensed brokers at Wisebuy Investment Group can help you to find the right loan for your needs. We can also help you with your loan application. We help a diverse range of clients in Newcastle, Lake Macquarie, Port Stephens, the Hunter Valley and the Central Coast.