A mortgage is a loan that you take out that is secured against your property and allows you to buy a house. If the mortgage payments are not paid, the mortgage lender has the option of seizing ownership of the property and selling it to recuperate any losses. In exchange for loan, the lender will charge you 'interest.' As a result, during the period of the mortgage, you will be required to pay the lender interest as well as return the amount borrowed in full before the mortgage expires.
Every lender will take a different method to determining how much you may borrow, and there is no fixed formula. The precise amount you may borrow will be decided by the cost of the house you want to buy, the size of your deposit, your income, and your affordability (considering your monthly financial commitments and any future commitments).
Whether you may utilise the First Home Owner Grant as a deposit is mostly determined by your lender and the criteria governing how they evaluate a borrower's eligibility. While some lenders may accept grants as part of a deposit, others may need confirmation of actual funds as part of the house loan application process. This often implies that you must have saved at least 5% of the buying price rather than obtaining it as a present from your parents or via government assistance.
When you think that a modest unit might cost half a million dollars, accumulating a 20% deposit – $100,000 – to purchase that apartment can seem impossible. This is when insurance might come in handy. Lenders mortgage insurance (LMI) is an additional cost, but it allows purchasers to enter the property market sooner without having to save up a whole 20% of the purchase price as a deposit.
It's tough to be patient when you're attempting to save for a down payment on a house and watch property prices continue to rise. However, there is another option: a guarantor. Borrowers with a small deposit will often employ a security guarantee. In this case, a family or friend (typically the borrower's parents) is willing to utilise the equity in his or her own house to guarantee the borrower's deposit.
Making additional mortgage payments might be a wise financial plan. Investing your spare income in your house may shorten the term of your loan while also saving you money in the long run. However, care must be taken to ensure that additional repayments are budgeted for and that the appropriate form of loan is obtained to allow for them.
It is not difficult to reduce the life of your loan; there are several easy things you can do to take years off your mortgage. Here are some pointers to help you become mortgage-free sooner than you expected.
Small extra repayments
Making additional payments is one of the most simple strategies to pay off your mortgage faster. Depositing lump sums, such as a tax return or a job bonus, is usually advantageous; but, it does not necessarily require huge quantities or payouts to make a significant difference — arranging for regular, small cash injections may have a significant influence throughout the life of a loan. Let's assume we pay an additional $50 every fortnight on a $500,000 loan. That saves you $32,000 in interest over the life of the loan. That works out to be just $25 each week.
Switch your payment intervals
You can also save years off your mortgage by changing the repayment frequency. To make up for the fact that there are only 12 months in a year and 13 four-week cycles, you can make your payments fortnightly instead of monthly. This means that you are paying off an extra month each year.
Make sure you have the right type of loan
Ultimately, your mortgage needs to suit you and your circumstances, or you will wind up paying too much. If you think your current loan no longer matches your situation, speak to us. We will be able to find the right product for you, as well as negotiating appropriate rates on it.
With so many options from different lenders, it can be hard to figure out if you got a good deal on your home loan. People who don't know a lot about mortgages can find it hard to do their research and compare what's available in the market, which can take a lot of time and be overwhelming for people who don't know a lot about mortgages. If you want to compare prices, you can use comparison websites. But because lenders call things by different names, it can be hard to figure out which one is the best deal. At Mortgage360, we know the special names and prices, so it's worth working with us. Not only will it save you time, but you'll also get a better sense of the benefits of each product.
Finding a cheaper interest rate does not always imply you've gotten a better bargain. In reality, a product with additional features may cost you somewhat more in fees or interest, but it may save you much more in the long term. Including options like an offset account will be beneficial since it will enable you to make greater repayments or apply any additional funds to the loan. Early payback fees may be charged by products that do not have this option.
Some of you may not have to go any farther than your employment to save money on your mortgage. If you work in a field that qualifies you as a 'low risk' borrower in the eyes of lenders, you may be eligible for special discounts. Contact us now and we will discover the greatest offer for you.
- Changes in interest rates are an inevitable aspect of the life of any loan and should be considered.
- The Reserve Bank of Australia's (RBA) cash rate influences the interest rates that banks charge on home loans.
- The RBA reviews the cash rate on a regular basis to ensure Australia's economic stability. The cash rate is the interest rate levied on loans made by the RBA to your lender. This, in turn, has a significant influence on the interest rates charged by your lender.
- With the RBA's official cash rate at all-time lows, now is an excellent time to figure out how this affects the interest rate on your home loan and whether you're getting a fair deal or not.
- Members of self-managed super funds have been permitted to invest in property provided they follow certain requirements.
- The first step is to consult with an expert to evaluate if investing via an SMSF is the best route to property investment given your unique circumstances.
- If so, the next step is to establish the SMSF. Be aware that transferring any existing super into an SMSF may take up to months so plan ahead of time.
- Talk to us and our specialists at mortgage360 and we will help you to get your SMSF investment property.
My bank is only lending so much, but we need more than they are offering. Can we still buy the house we like?
Mortgage360 works with a variety of lenders. Lending regulations vary by lender, and some may lend more than others; we must get down and discuss affordability to determine which lenders' requirements you fulfil and how much you may borrow.
- Self-employed borrowers often face the difficulty of not being able to provide a slew of pay stubs and tax returns to support their loan applications. However, this should not deter you from purchasing your ideal house.
- Many lenders provide low-doc loans to self-employed borrowers who are unable to provide paycheck slips or employment records. This implies that, instead of the traditional evidence, you use bank statements, accountant declarations, and financial records to demonstrate your capacity to service a loan.
- Talk to us and we will be able to find a suitable product to suit your needs and circumstances.
We offer a wide choice of products from several lenders, including solutions to assist customers who have had credit problems in the past.
When a profit is gained from the selling of an investment, the sale price exceeds the initial purchase price, a capital gain is created. You will have incurred a capital loss if you sell an investment property for less than the buying price. An industry specialist can assist you in calculating your nett capital gain or loss.
Conveyancing is the legal process done by the solicitor or conveyancer you choose when buying or selling a home. It's essential to have a conveyancer or a solicitor set up ahead of time since, as a buyer or seller, you'll need this in place to begin and finish the transaction. If you need help making a decision, we can assist you.