Do you know where your deposit is coming from?
Saving for a deposit is tough, especially if you’re already paying rent. You need a minimum of 5%, but lenders prefer 10% to cover all the costs of buying a home.
With a smaller deposit, you’re going to pay lender’s mortgage insurance (LMI), which can add tens of thousands to your loan. Some lenders let you add LMI to your home loan total and pay it off as part of your mortgage, but some need it upfront before they’ll approve your home loan.
Every little bit helps when you’re getting a deposit together. Check your nest egg is sitting in a high interest savings account so your money is working for you. Term deposit accounts can help you avoid the temptation to drip into it.
Do you understand the guarantor process?
If the lump sum is not achievable, a guarantor might be an option. Having a family member use their equity to guarantee your loan is a smart way around a lump sum deposit. Remember, you still need to have the funds to make your repayments and for other upfront costs.
Have you considered the other costs in buying a home?
You need some upfront cash to cover costs of the buying process like building and pest inspections, stamp duty, conveyancing (the process of transferring property ownership), council rates and settlement fees. Plus, you might need a removalist or pay to break a lease. Use an online calculator to work out your costs to buy.
Are you eligible for a first home buyers grant?
This can make a big difference to your deposit. In Queensland, the First Home Buyers Grant is on the table for new homes. Not everyone is eligible, so don't rely on it until you’ve done your homework.
Have you investigated different types of home loans?
There are many ways to structure a home loan. Some of the choices include:
When you’ve fallen in love with your dream property it can be hard to make a rational decision. Ensure you’ve researched all of the possible loan options to stop your heart ruling your head.
Do you understand how interest rates affect your monthly repayments?
It’s important to know exactly how much you will be paying in repayments each month, run the numbers, and be realistic about how much you need to live. Interest rates are low now, but what would happen if they jumped to 7%? Or more? Do your sums with a repayment calculator and see if you could still get by. A cheaper property might mean coping with a bump up without getting stressed.
At QBANK, we are pleased to share good news that may benefit our members, such as the announcement of the $25,000 HomeBuilder Grant, a great opportunity that could not only help you out, but also Australia's economy following the slowdown of recent months.
We are all looking for convenient ways to live our lives and complete our daily tasks from the comfort of our own home. Download the QBANK App today for 24 hour access to your accounts. The QBANK App allows you the freedom to bank on your terms anywhere, anytime.
QBANK encourages members to stay alert for COVID-19 scams as scammers take advantage of the current situation, people’s movements, moods and personal needs.