First Home Buyer

Home Loans for First Home Buyers

A first time home loan borrower can easily get puzzled with all the available information when looking for a new home loan. Home Loans can be very confusing for first home buyers, often finding contradicting information. For a better understanding of the Home Loan process there are some important details to be aware of .

First, a five to ten percent of the total property value is needed as a deposit for a new home loan. This serves as some sort of a reservation fee for your desired property. The bigger the home loan amount, the bigger the deposit might be.

You should also be aware of the First Home Buyers Grant. Since independent lenders have promotional deals for initial loan borrowers, Federal and State governments offer similar incentives.

Be mindful of any additional costs that every new loan deal entails. These costs include application fees, processing fees and mortgage insurance premium if you will borrow more than 80% of the property price. Stamp duty fees and conveyancing expenses might be included in the extra fees as well.

The amount that you can borrow  on a new loan will depend on the finances that you have. You can borrow a larger amount if you have sufficient savings. It is also important that you consider the monthly repayments you’ll have to pay once the loan term starts.

One of the most important factors to consider is  choosing a home loan type. Whilst there are numerous home loan products that a lender can offer, you must also choose between a variable or fixed home loan. A fixed home loan gives you repayment stability while the variable home loan is subject to change.

Variable home loans tend to have a higher interest rate but it can go down once the interest rate of the official cash rate does. It also carries more useful features than its fixed counterpart. On the other hand, a fixed home loan makes you immune against interest rate hikes although it does not allow you to make extra repayments.

While both loan types pose certain advantages, you can learn what deal is best for you by seeking the advice of a home loan consultant. Home loan consultants are great allies for first home loan buyers as they can guide you through the loan application process.