By Richard Denholm*
GETTING started in the world of property is a big step and it can get extremely convoluted. Fresh new entrants may encounter problems they did not expect and might not know how to handle them.
Now is the time to get started in property and watch your capital grow.
Continue reading for tips on how to beat the three obstacles first-home buyers are expected to encounter.
- Saving for a deposit
Saving a significant deposit is incredibly important for first-home buyers who want to avoid additional interest rates and having to pay for lender’s insurance. This can be the most time-consuming part of the whole process.
A recent BankWest report describes how it takes, on average, just over four-years for the average Australian first-home buyer to gather a 20 per cent deposit.
A great way of amassing this capital a lot faster is to utilise the $20,000 first-home owner’s grant.
To qualify, you need to either have a new home built or purchase a newly constructed property. Utilising the grant means you need a smaller amount of savings. This means you will be in a position to qualify for a loan sooner.
- Finding the right loan
The world of home loans is incredibly complex and with CoreLogic RP Data reporting that capital city property values are continuing to increase at a steady rate, it’s more important than ever to know what you are getting yourself into and how much you can borrow.
This will be heavily affected by the deposit you have managed to save, as well as the property you are interested in, but it’s best to get the right help in understanding this enormous financial commitment.
You can defeat this particular problem by casting your credit net wide and speaking to a mortgage broker for both advice and loan options on your first home loan.
- Making mortgage repayments
If this is your first home, you may be paying more towards your mortgage than what you were paying in rent. This can make quite a big difference to your budget and may take some getting used to, but the increased equity gained is well worth it – something that renting doesn’t get you.
Dealing with this hurdle can be as easy as cutting out some superfluous spending.
However, your best bet to stay on top of your repayments is to ensure that you have insurance covering medical emergencies or loss of income. Either of these scenarios could end up with you struggling to meet your repayments, so stay covered and keep yourself protected.
To discuss whether you qualify for your first home loan or a free home loan review, contact your local Smartline mortgage broker Richard Denholm to see how you can improve your situation.
*Richard Denholm is a home loan specialist at Smartline Personal Mortgage Advisers Rosny Park.