For most people looking to buy or build a home, there is a lot of confusion on where & how to start researching home finance.
While everyone’s borrowing capacity differs due to individual personal circumstances, we have put together some finance fundamentals to help guide you in the right direction.
Can you afford a house?
This question is asked a lot, as many people don’t know if they can afford to buy a home. If you’re one of those people, we recommend getting in touch with our team by completing our “How much can I borrow?” form, as many people are surprised to learn that they can afford to buy their own home for the amount they pay in weekly rent.
How much can you borrow?
How much you can borrow for a mortgage differs from person to person. It’s dependent on a number of factors including;
- Size of your deposit
- Credit history
- Employment history
- Debt levels
- Current income
If you think you may have trouble securing a loan based on any of the above factors, make sure you speak with Easystart as there are a number of loan products designed to help people with these challenges, get into a home of their own.
Be Mindful Of Debt
One of the biggest things that can affect your borrowing capacity is the amount of debt you already have. Banks pay close attention to personal loans and credit card debt and some people don’t realise this can work against their chances of securing a home loan. Reducing your debt can help improve your home loan outlook considerably.
If you do have debt, there are options out there for you - here at Easystart Homes, we offer a Debt Assist solution. With Debt Assist, we pay your debts up to a certain amount to help you get in control and qualify for a home loan. We'll help you get out of debt - and get on the path to owning your home.
First Home Specialist
As a first home builder we have lots of experience helping people just like you, get into their own home using low income lenders, government incentives and other home loan options beyond the big banks.
The WA State Government has made the home buying process easier for first homebuyers with its $10,000 WA First Home Owner grant.
The grant is available to eligible first homebuyers building or buying off-the-plan, or purchasing newly built homes.
It is available for purchases of homes in Perth up to the value of $750,000.
The good news for first home buyers is there are stamp duty concessions and exemptions and homes purchased with a value of less than $430,000, do not owe stamp duty.
There are also concessions for homes priced between $430,001 to $530,000
For more information visit: finance.wa.gov.au
Keystart is another government initiative designed to make home ownership affordable for those who don’t meet the criteria for home ownership with traditional lenders.
For homebuyers that qualify for assistance, Keystart offers home loans from as little as 2% deposit with no lenders mortgage insurance.
For more information on the low deposit home loan initiative visit Keystart.
There are many upfront costs involved in applying for finance and include things like stamp duty costs, loan fees and mortgage insurance.
In terms of upfront fees, if you are a first homebuyer you can expect to pay fees of approximately $4,000-$5,000.
If you are not a first homebuyer, this could stretch to about $10,000- $15,000.
So that's it, a short list of some of the factors to be aware of and questions to keep in mind when you're thinking about buying your first home. For more information about what you need to know as a First Home Buyer, make sure you visit our What You Need To Know page.