24 November 2011
More and more first home buyers are rushing to get their finances sorted out since the NSW government recently announced that from 1st January 2012 stamp-duty exemptions for first home buyers will no longer apply for people buying existing properties.
MyRate gives first home buyers some advice to prepare themselves to jump into the” unknown” world of mortgages.
First, it is a good idea to do an assessment of your situation to see how much you can borrow.
Ask yourself how much money you can afford to pay every month after your other financial commitments.
Before you commit yourself to a home loan, you should always make sure that you will still be able to afford your mortgage in the event of an interest rate rise. Do you think you would make your repayments with no problems or you are unsure of how you would cope with higher repayments? The Money Smart government website has got a great tool to assess your situation & test different scenarios.
After you have determined the amount you can borrow, MyRate advise you to review how much deposit you need to save to be able to afford your dream property. You will need at least 5% deposit as most lenders will not be prepared to lend you more than 95% of the property price. The bigger your deposit, the less you have to borrow, and the more you will save in interest.
So if you have a big enough deposit & know how much you can borrow, then start contacting lenders to obtain a loan pre-approval so that when you are ready to buy you know which lender you will go with.
