For most people, the purchase of your house is the biggest single purchase of your life. More thought, savings and preparation is involved than any single transaction you will most likely ever make. The rules surrounding interest rates, down payments, debt to income ratios and other unfamiliar financial territory can make the savviest shopper feel lost and confused. Finding an experienced broker to handle the process shouldn’t leave your pockets empty.
There are many fees associated with obtaining a mortgage. There are many people involved in the process, from inspectors, brokers, lenders, agents and more. Each of these individuals and companies will charge fees for their services. Some of their fees must be paid for in advance, but there are some that are a part of the closing costs due at the signing of the final documents on settlement day. If you are looking for cheap home loans in Australia, finding cost effective financing doesn’t have to leave you without the quality service you deserve.
If you are seeking out your first residential property, there are first time buyer’s incentives that your broker can apply for on your behalf. This grant can have a significant impact on the cost of your mortgage. The FHOG program (for those buying residential property for the first time) can provide up to $10,000 if you are purchasing a brand new dwelling or $3,000 if the location has been previously owned. There are a few rules concerning qualifying for the grant. The value of the home must be $750,000 or less and if you are purchasing property north of the 26th parallel, the value cannot exceed $1,000,000.
The Department of Commerce also has a grant with a value of up to $2000 which originates from the Real Estate and Business Agents Act. Applying for these attractive incentives can enhance your ability to obtain the home you are looking for with significant savings. By participating in these generous programs, grants do not have to be paid back and can also help lower your payments at settlement and beyond.
One of the most important lifestyles you can lead in the time period before purchasing property is a lean one. Keeping your credit up to date, making your payments on time and not opening too many charge accounts is one way to keep you looking good on paper. By showing financial responsibility over time, you are more likely to be offered a lower, more attractive interest rate. The cost savings over time can be quite significant.
Also, showing that you are serious about your desire to own is the accumulation of savings. In many types of mortgages, a down payment percentage in relation to the cost of the property is required. The more you can save, the lower your monthly payments will be. A good broker will take the time to evaluate all aspects of your financial health to advise you on how much you will need to put down, how your credit will affect your ability to secure a good interest rate and most importantly, how much you can afford to borrow. When beginning your search for the perfect location, knowing the cap on your purchase cost will help keep you focused on properties you can truly afford.
Not everyone can afford to have a large sum of money to use as a down payment. There are many programs out there that can analyse your current situation and advise you on the best course of action to take. Also, knowing how long your plan on living in the same location is another potential issue to consider. If you are looking to purchase now and sell a few years down the road, make sure you have sound investment advice as you don’t want to find yourself owning a property with a declining market rate that will leave you taking a loss financially.
Are you selling another property before purchasing a new one? There are factors to consider that could affect you when your find what you are looking for before your current property sells. Your mortgage broker can advise you on the best course of action to take. Contracts can have special wording added to ensure you aren’t made to leave your residence before your move is settled. There is also loan bridging that can help you purchase a new property before you sell your current one.
Enquire about any fees that your mortgage servicer may require. In many cases, the fees for broker services are paid for by the lender and you won’t have to pay out of pocket. If you need to have a cheque for your deposit, ask about deposit bonds to help make this option easy to manage. Before signing paperwork binding you to their services, make sure to ask lots of questions and get the best deal to save you money.
Some of the fees that you might want to learn more about are any required application and inspection costs. The property you are interested in will need to be inspected before it can be approved for purchase. Ensuring that the residence meets proper safety codes in all areas can save you a tremendous amount of money in the long run or possibly steer you away from a substandard property. In other cases, current owners can fix the issues found in an inspection and get reinspected to make sure the repairs meet criteria.
Will you be required to pay for any fees related to a conveyances? This vital member of the lending team prepares the deed for the mortgage that is held on record until you have finished paying off what you owe. If the conveyances works for the lender, that could save you money as well.
Finally, if you are borrowing a great deal of the value of the property, usually in excess of 80% of the residence’s worth, you will be required to purchase what is known as mortgage insurance. This can add to your monthly payment. Ask about finding the lowest quote and if you have options like searching for the best rate yourself. There are savings to be found in almost every aspect of the process.