Home Deposits Made Affordable
Owning a house was made accessible with the government’s First Home Owner Grant scheme which was introduced in 2000. Today, banks like NAB and Bankwest require only 5% deposit in most cases whilst ANZ, Commonwealth Bank and HSBC may require as low as 3% in owner occupied homes and 5% for investment properties. Variation in required deposits can also affect the interest rates of home loan packages.
Since January 2011, there is an increase in home loan lenders requiring only 3% deposit. Last year, if the required deposit was 10% and you’ve saved up $30,000 then you can purchase a property worth up to $300,000. Now, with your $30,000 savings and a 97% Loan to Value Ratio (LVR), you can purchase a property worth up to $1,000,000.
For first time home buyers relying on the government’s grant, your $7,000 can allow you to purchase a house worth $233,333 with a 97% LVR.
Featured First Home Buyers Home Loan
Illawarra Home Loans – Bank Beater 95% Plus Home Loan is a great option for your first home or your first investment property. Borrow up to 95% of the property value plus you have the option to add the LMI onto the loan. A 100% offset arrangement is also available.
- Interest Rate of 6.26%
- Comparison Rate of 6.28%
- Application Fee of $0
- Maximum LVR With LMI: 95%
- Minimum Borrowing: $100,000
- Maximum Borrowing: $750,000
Top First Home Buyer Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Illawarra Home Loans Bank Beater 95% Plus Home Loan |
Deposit 5% of your loan amount so you can get your home sooner. You also have the option of adding the LMI to the loan amount. | 6.26% | 6.28% | $0 / $0 | 95% | $100,000 / $750,000 |
 
|
 Resi Home Loans – Flexi Fix |
Fix up to 50% of your home loan at a low fixed rate and the other 50% at a low variable rate. | 5.99% | 6.75% | $0 / $0 | 95% | $50,000 / $2,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan |
The First Home Buyer Loan of the Year for 2011. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
|
 NAB National Choice Package – 2 Year Fixed Rate |
A low interest rate home loan with a low annual fee | 5.89% | 6.65% | $0 / $395 | 95% | $250,000 / $1,000,000 |
|
 Loans.com.au – Dream Loan Express – Variable Home Loan (80.01% -95%) |
$0 application fee and a low interest rate. | 6.20% | 6.22% | $0 / $0 | 80.01% – 95% | $50,000 / $750,000 |
|
Illawarra Home Loans Bank Beater Home Loan |
A low variable rate and a further 0.5% rate cut after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
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With home loans made affordable, this does not mean that it’s up for grabs. You still need to meet the necessary requirements. Getting a home loan approved nowadays does not rely on just having a stable full-time job and money for equity. The best advice any home loan lender can give you is to have a good credit standing.
Home loan lenders scrutinize every detail of your financial history. They review all the loans you’ve had from student loans to personal loans to credit cards. They even review your rental history. Lenders check not just your ability to pay but your payment habits as well. Do you repay your balances on time or not? Have you ever failed to pay off a debt? Your spending and saving habits are evaluated.
Even though now is probably not the best time to purchase a house with a slowdown in employment growth and prices of daily commodities continue to rise, those who can afford can take advantage of the great deals offered to boost the housing market. Nevertheless, you must maintain a good credit score.
Here are a few tips on how to improve your credit rating:
1. Financial History
Your financial history tells a possible lender how risky it is for them to lend you money. If you have a good financial history, the risk for them is lower in lending you money since it shows in your financial history that you pay every debt you owe. This gives the lender the impression that they’ll get their money back. If you have a bad financial history, then it spells trouble for them and the chances for the lender not getting their money back are higher. Of course, no lender wants this scenario. So, even if you have a full time job and possibly a good income but have a history of non-repayment of loans or credit cards, the likelihood of your approval is slim to none. You can also boost your financial standing with records of the capability to save.
2. Credit Cards
Having credit cards and credit card debts influence the decision making of possible home loan lenders. It is important to minimise having both credit cards and credit card debts when you are planning to apply for a home loan.
The lender’s rationale in declining an applicant with multiple credit cards and credit card debts is simple. Too much debt can be overwhelming.
A person juggling with credit card debts might be overwhelmed with the addition of mortgage repayments. The chances of financial mismanagement are higher. Thus, lenders would like to avoid being caught up when borrowers are in situations like this.
For those with multiple credit cards and not necessarily with multiple credit card debts, lenders also tend to limit, if not avoid, loan amounts to give you. Lenders wouldn’t want to bombard you with more loans and have a difficulty with your repayments.
People with only one credit card have a better standing in terms of a lender’s assessment. Having one credit card means owing one credit card company only. Financial management is easier and the addition of a mortgage repayment has room in your budget.
Rejected credit card applications also lower your credit rating. When your credit card application is rejected, it is advisable to prepare the necessary documents or proof before sending out another application. Make sure your requirements are fool-proof to get that approval.
3. Savings
Having money in the bank or in a high interest savings account, though not necessarily big, is a good indication that you are on top of your finances. Regular deposits even in small amounts give lenders a good impression. This, coupled with a good financial history, is sure to get your home loan approved.
If going through all these data is confusing for you, you can always hire the services of a mortgage broker to help you get the best possible home loan package for your budget.
Related posts:
- Home Deposits Made Affordable
- First Time Home Buyers Guide
- First Home Owner Boost Information Sheet (NSW)
- First Home Owners Grant – Australian Capital Territory
- First Home Buyers Scheme
- How to apply for first home owners grant
- No Deposit Home Loan – An Option For First Home Buyers
- First Home Owner Boost Overview (VIC)
- First Home Owner Boost Information (ACT)
- Federal Government First Home Owners Grant
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
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Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
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State Custodians Mortgage Company Standard Variable Offset Loan | Awarded the 2011 Non bank Lender of the Year this feature-packed loan rewards customers with a bonus rate drop of 0.25% after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
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