All across Australia, there are millions of people looking to a buy Property or home - either now or in the future. Over the last few years, lower interest rates have come along, making it more affordable than ever to buy a Property. When most people stop and give it some thought - buying a home makes a lot more sense than renting a home or an apartment.
In the past, Australian property investors and homebuyers could access home loans with as little as a 5% deposit. Sometimes, you could borrow the entirety of the property's value -- and in some cases, loans as high as 105% were available.
Recently, lending criteria from banks are stricter, and most banks and lenders have restricted the loan to valuation ratio that they’re willing to extend to borrowers. So, if you don't have much of a deposit at the ready, is it possible to get a high LVR loan to buy a house? The simple answer is, it depends.
The Big Four banks may be willing to finance home purchases of up to 95%, provided you have very strong employment history and savings history and evidence of genuine savings. The loan amount will also strongly influence the lender’s decision. Non-bank lenders may also offer up to 95% of the property value. They may also add an extra 2% to help cover lenders mortgage insurance (LMI) capitalisation. This means the borrower can get a 95% loan and then add the cost of the LMI to the loan.
You’ll know your ready to buy a home when you know exactly how much you can afford, and you’re willing to stick with your plan. When you buy a home and get your monthly mortgage payment, it shouldn’t be any more than 25% of your total monthly income. Although there are lenders out there who will say that you can afford to pay more, you should never let them talk you into doing so - but stick to your budget instead.
Keep in mind that there is always more money involved with a home other than the mortgage payment. You also have to pay for utilities, homeowners insurance, property taxes, and maintenance. Owning and caring for a home requires a lot of responsibility. If you’ve never owned a home before, it can take a bit of time to get used to.
Before you fill out any applications, you should always look over your credit report and check for any errors. Although you may think you don’t, you can easily get an error on your credit report and not even realize it. If you have an error on your credit report, it can cost you a lot of money in interest rates. An error will decrease your credit score, which will put you in a higher interest bracket and ultimately cost you a lot more money in the end. Therefore, you should always know your credit before you approach a lender.
If you check your credit report early enough, you may leave yourself enough time to fix any problems and get your credit back on track. Rebuilding credit can take time, sometimes even years. You should always plan ahead - and give yourself plenty of time to fix your credit.
Buying a home will require a bit of commitment on your behalf. You should always strive to get the best possible deals, which means knowing your credit and where you stand. This way, you can get the best interest rates. You don’t want to buy a home with bad credit, simply because you’ll pay a lot more money for the home. If you take the time to fix any credit problems and save up some money - you’ll be able to get a much better home for your money. We help in getting your finances sorted too - feel free to BOOK a no-obligation consultation with us :)
Call or email for the list of Positive Income Properties today as tomorrow is another wasted day. If you would like some help or just to discuss what you are looking to do please contact us on e:firstname.lastname@example.org m: 0418792215 t: 1300 171 000
Other Sources: MortgageAU