Money Saving Tips For Purchasing A Home In Australia

Understanding “loan terminology” is crucial to a successful home loan. It is important to understand terms or you may end up agreeing to something you hadn't planned on.

New homeowner loans

If you are a new homeowner looking for your first home loan be careful to shop around and compare. Many companies offer a special rate for new homeowners. Be sure there isn't a “catch” later.

First time home buyers may be eligible for up to $7,000 through a “one off” Government incentive payment. More information about this and other government programs can be found at your local State Revenue Office.

If your home loan is more then 80% of the property value, some mortgage brokers and lenders require that you to take out mortgage insurance. This is a cost to you so if you can keep the loan under 80% you will not have to pay this insurance premium.

Home loan rates

Some home loans are non-conforming. This means the loan does not stick to a more rigid structure like normal home loans. These “bad credit loans” are good choices for people needing a home loan due to a lack of a payment history or self-employed individuals. The main difference of a “bad credit loan” is that payments and rates are less flexible and slightly higher then a normal home loan.

Home loan rates will vary because of the many types of home loans. Some will have fixed rates. These rates will remain the same as opposed to variable rates, which can change over time.

Home loan calculators are a valuable tool for choosing a home loan and home loan cost comparisons. They can help you calculate costs and answer key questions such as:

• How much can I afford to borrow?
• Will paying a lump sum payment help or hurt?
• How much are my repayments?

Australian property purchases have a government stamp duty tax based on your State and the purchase price of the property. However some first homebuyer loans may have discounts on this tax. Ask your mortgage broker to see if you qualify. In addition, mortgage stamp duty may also apply, however this is being phased out in most States.

Other options

According to The Australian Bureau of Statistics, 30% of home loans are refinanced. This shows that refinancing your home loan is not difficult to do.

One home loan option is to use your current home equity to refinance a new mortgage. Refinancing can be done with the same type of loan you originally used. It also pays to shop around for new options, as there may be better terms and policies currently available.

Once you have chosen your Australia home loan options, follow up with your mortgage broker and local revenue office for advice and instruction for a positive home loan experience.