Re: Home Loans

[Macca86]

Ok so myself and Mrs Macca are considering going for a home loan soon as there are a few places in town we are keen on at the moment. I am very clueless on this stuff and have only just recently been starting to try and do some research on the whole matter of buying houses. I already have enough for a deposit, and I havnt owned a house before so would get first home owners grant as well.
I know there are several people on here who are home owners/investment property owners so I was wondering if you had any basic advice or things to look for when going for a home loan? Anyone in particular good/bad to borrow from in your experiences etc? Any advice is appreciated

 

[minux]

All I can advise is look around. Go and talk to your bank manager, make notes, then go to a different bank and compare.

Much like buying a car, read the fine print etc.

 

[Tatiana]

Shop around to get a good deal and make sure you can still live comfortably once the mortgage payments are made. Buy something small and build up equity rather than end up struggling with a giant mortgage.

 

[CSP]

As a first step, go have a meeting with a Mortgage Broker. That'd be my best bit of advice. See how all the different options compare. Plus they won't sugar coat a bank's product like the bank trying to sell it to you will.

 

[minux]

Oh one more bit of advice I live by. If you cannot afford the mortgage repayments based on 13% rates. You cannot afford the mortgage.

 

[CSP]

Oh one more bit of advice I live by. If you cannot afford the mortgage repayments based on 13% rates. You cannot afford the mortgage.

I did my calculations based on 15% but yeah... Agree with that!

 

[Tatiana]

Back in the 80's the interest rate hit around 18%, people lost their homes left right and centre. Back then mine was capped at what was then considered low - 13.5% so I was on easy street.

The lesson in this is make sure you have a buffer with your mortgage payments so that if rates rise you are going to be ok.

 

[Jesterarts]

Me and my fiancee are just about to start building a place.

Most of our loan selection, etc was handled by a finance company for us primarily based on interest rates.

We've got the ANZ Simplicity PLUS, from what I understand it's a no thrills package that's relevately flexible and has a alright rate compared to the other big 4.

Most financial advisors will tell you to budget 4% more than what they are when you take the laon out to ensure you're pretty much safe with repayments.

Other tips, if you can afford to, make extra repayments. An extra hundred here and there makes a big difference long term. Plus in alot of cases what you pay extra now is a safety next for down the track if you're off work with an injury. In our case I know that what we pay extra we can withdraw and use to make repayments with.

Oh, and also get a loan with a "Interest only" option. With our package, we have 12months available to us of interest only payments if something REALLY fits the fan. This is a double edged blade, on one hand you are basically giving the bank money with no gain to you, on the other hand this might give you the time you need to get back on your feet from some sort of major financial even in your life.

Also make fortenightly payments rather than monthly. Jump on an online calculator and you'll see the difference it can make.

Beyond that, go see an INDEPENDANT financial advisor and they will be able to work out what the best course of action is for you.

http://www.yourmortgage.com.au/news/budgeting-for-interest-rate-rises/5082

Have a read of that site, fairly high level overview of what to look for and think about. Give you a starting point.

 

[Troy711]

+1 for a broker for reasons previously mentioned. Also check to see if you can get the stamp duty concession if it's still happening.

 

[Deutscher]

my and my partner just built a home. we've just moved in 2months ago.

I don't have much advice to offer because it's our first home + we didn't have a choice in banks but do check the rates and also get familiar with fixed/flexible pros & cons before making a decision.

When we were building we were paying interest only (we were renting at the time, so paying rent + mortgage wasn't a option + we were 21).

We used the $21,000 for most of our deposit. We only needed $25k on a $360k loan. We went through a mortgage broker and she sorted it all out for us. We are with keystart (only lender that needed less than 10% deposit).

Also like someone else mentioned... do your repayments as frequent as possible!! We are doing payments weekly... if I could I'd do it daily. The quicker you pay it the less interest ur payin.

Don't do what I did. I had a credit card + owed my dad some money... I'm still trying to pay it back and man am I broke all the time. 52% of my wages go to mortgage (including bills + food), 30% goes to repaying credit card/dad ... leaving me with 18% to pay for fuel, credit, and other general crap.