The most difficult part when buying your first home is coming up with cash for your deposit. Second to this is preparing for the other costs that come with the home purchase. The incomings and outgoings that come with buying a new home can be very taxing to the first home buyer. This makes preparing every needful thing a must.
Normally, when a buyer is seriously considering purchasing a home, he will have a lot of questions in his mind; and he wants them answered. Below are some of these questions, with answers that will hopefully help him make, what will probably be, one of the most important decisions in his lifetime.
How Much Will You Need for a Deposit?
Normally, the ideal is that you save as much as you can before you scout for the property to buy. It is also important that you have an idea how much the property’s purchase price is so that you can begin to plan how much you will save for your deposit. Generally, around 5% of the purchase price is required as deposit, so you need to have the amount ready when you begin looking for the home you want. You may need to pay Lenders Mortgage Insurance which will allow the lenders to let you borrow a bigger amount. The Lenders Mortgage Insurance can then be incorporated in your upfront costs or in your loan repayments. This spreads out the total amount over a longer period which makes the loan more affordable and manageable.
What if I don’t have a Deposit?
If this is the case, there are available options to help you get a home loan.
1st Option: Family Guarantees
You may be able to use a guarantee from your parents. This guarantee has to be supported by a mortgage over your parent’s property, or a term deposit, as equity to support you with your home purchase.
2nd Option: Deposit Protect Bond
This option will allow you to push through with the purchase of the property even before you have the actual cash deposit ready. This is very helpful most especially if your money is tied up in other investments, or when you are eligible for the First Home Buyers Grant and using that to help fund your deposit. You can also use a Deposit Protect Bond at multiple auctions, or by private treaty.
Other Costs
There are other upfront costs that should be considered. These are Conveyancing and Legal Costs; Government fees, including stamp duty, although stamp duty can be included in the loan; and Title search and Registration Fees. Always remember that these upfront costs are calculated based on the type of property you are buying, and the state you live in.
Also consider the costs associated with Pest and Building Inspections. Then there’s the Home Building Insurance prior to settlement, as well as Contents Insurance when you move in. Look into these costs seriously as they can be very substantial and may burden you heavily later on.
As in everything else, planning ensures success. So, when planning to buy a home, meticulously plan every detail. This will ensure that you will not only get the best deal, it will definitely mean that you will also enjoy and love your own house.
Normally, when a buyer is seriously considering purchasing a home, he will have a lot of questions in his mind; and he wants them answered. Below are some of these questions, with answers that will hopefully help him make, what will probably be, one of the most important decisions in his lifetime.
How Much Will You Need for a Deposit?
Normally, the ideal is that you save as much as you can before you scout for the property to buy. It is also important that you have an idea how much the property’s purchase price is so that you can begin to plan how much you will save for your deposit. Generally, around 5% of the purchase price is required as deposit, so you need to have the amount ready when you begin looking for the home you want. You may need to pay Lenders Mortgage Insurance which will allow the lenders to let you borrow a bigger amount. The Lenders Mortgage Insurance can then be incorporated in your upfront costs or in your loan repayments. This spreads out the total amount over a longer period which makes the loan more affordable and manageable.
What if I don’t have a Deposit?
If this is the case, there are available options to help you get a home loan.
1st Option: Family Guarantees
You may be able to use a guarantee from your parents. This guarantee has to be supported by a mortgage over your parent’s property, or a term deposit, as equity to support you with your home purchase.
2nd Option: Deposit Protect Bond
This option will allow you to push through with the purchase of the property even before you have the actual cash deposit ready. This is very helpful most especially if your money is tied up in other investments, or when you are eligible for the First Home Buyers Grant and using that to help fund your deposit. You can also use a Deposit Protect Bond at multiple auctions, or by private treaty.
Other Costs
There are other upfront costs that should be considered. These are Conveyancing and Legal Costs; Government fees, including stamp duty, although stamp duty can be included in the loan; and Title search and Registration Fees. Always remember that these upfront costs are calculated based on the type of property you are buying, and the state you live in.
Also consider the costs associated with Pest and Building Inspections. Then there’s the Home Building Insurance prior to settlement, as well as Contents Insurance when you move in. Look into these costs seriously as they can be very substantial and may burden you heavily later on.
As in everything else, planning ensures success. So, when planning to buy a home, meticulously plan every detail. This will ensure that you will not only get the best deal, it will definitely mean that you will also enjoy and love your own house.
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