Tips for First Time Home Buyers on How to Get Home Loans

Buying your first home will probably be the biggest and most important purchase you will ever make. It can be very stressful and can even leave you sleepless for nights wondering if you are making the right choice, especially when it comes to choosing the right home loan.

With all the other questions that attract first-time home buyers, the question of finding your deposit and getting the right mortgage are probably the ones that demand the most attention.

There are several different resources that first-time home buyers can refer to for guidance; From financial institutions, government offices, books and the Internet there is a great deal of information waiting to be obtained. However, there are a few things first-time home buyers should consider when looking for the right home loan.

Determine how much home you can comfortably afford. There are calculators online that can help you get a general estimate of what a lender might give you.

However, you should also consider your existing debt, living expenses, and closing costs when trying to establish what your budget should be.

Gather your deposit and find out if you are eligible for the First Time Home Buyers Grant offered to people who have never bought or owned a home or property. You can check this on the government website: http://www.firsthome.gov.au.

You should try to get at least ten percent of your projected budget price as a deposit if you want to avoid paying the lender’s insurance in addition to your mortgage.

First-time home buyers shouldn’t feel pressured to make quick decisions by lenders who use scare tactics. Instead, they should shop around to find out what the current interest rates are, who offers the best deals, and how flexible the terms are.

You should never sign anything without first understanding your mortgage agreement. Find out if there are penalties for additional payments.

Find out how loan interest is calculated. If you’ve chosen a variable loan, find out the length of each adjustment period. Find out how much of your monthly payments will cover interest and how much will go to principal.

As long as you do your research and find out before making a decision, you can take much of the stress and worry out of this important time in your life.