First Home Buyer Mortgage
Each person is different and it is important to find the right mortgage that suits your needs. With many providers offering a range of products it can be hard to find the right mortgage that will help the first home buyer in Australia. To find your right mortgage it is important to find what type of mortgage suits your needs and to compare service providers for the best deal. This article aims to summarise the types of mortgages available, show ways to compare your mortgage, and show some of the special deals that may be available to first home buyers in Australia.
The Main Types of First Home Buyer Mortgages in Australia
The first step to find the right mortgage for your needs is to find out what type of mortgage will best suit your lifestyle. There are a few mortgage types available and have summarised the main ones available:
- Fixed rate mortgages. These are mortgages where the interest rate will stay constant over the fixed rate period. This fixed rate period can usually be between 6 months but can go for the duration of the loan in some cases. These types of loans are handy if you do not want to experience the high interest rates that will inevitably occur over the duration of a housing mortgage. However, you also do not get to take advantage of times when the interest rate may be low. This is for the people who would like consistency.
- Variable rate mortgages. With these mortgages the interest rate will vary over the period of the mortgage and they are the most popular in the country. The variable rate allows you to take advantage of time when the interest rates may be lowered. You will however, also experience the high interest rates when they are raised. Many variable rate interest mortgages do have an option to fix the mortgage if you would like.
- Mixed/Split mortgages. The split loan mortgages allow you to set some of your mortgage on the fixed rate and some on the variable rate. This option is great for those who like to hedge their bets. You will experience the rises in interest rates if they occur but you will not feel the full effects of the rise as only part of your mortgage will be on the variable rate. You will however, gain some benefit when the interest rates are lowered.
- Line of credit or equity mortgages. The line of credit mortgages are secured by the equity in the home. It is commonly used as an interest only mortgage and is not suitable to first home buyers as they will typically attract a higher interest rate.
Special Offers for First Home Buyer Mortgages in Australia
Now that you have identified the right type of mortgage for you there are special offers that apply for first home buyers in Australia. These may include lower interest rates, periods of fixed rates and many more. These specials offers may include:
- Honeymoon rates. Honeymoon rates are special rates given to first home buyers for a short period at the start of the mortgage. Examples of the honeymoon rates include a fixed period of interest for the first year of the mortgage and no account fees for the first year. Be sure to take advantage of these as they will help you get on track before the full payments start.
How to Find & Compare First Home Buyer Mortgages in Australia
Once the right type mortgage for you has been found you will then have to select who to get you mortgage with. This could be a bank or many other service providers that are available.
- It is essential to compare the mortgages. Although most service providers offer similar products small details like interest rates and fees may be different. Check who offers the best rates and the best deals on fees for your preferred type of mortgage. Beware of fees that may raise the monthly cost of paying the loan.
When you are buying your first home in Australia you must identify what type of mortgage will suit you. After this has been done, it is essential to compare all offers that are available to you so you can be sure you arise with the best deal and the house of your dreams. You can contact Home Loan Finder as we are just a phone call away and can help you find the best deal in Australia on your first mortgage.
How Important are Interest Rates?
Of course interest rates are important. You only have to look at the calculations showing you how much interest you will finish up paying over the term of any home loan. Interest rates can also be crippling for many especially if you have tended to buy outside your comfort zone and rates have risen. What you must look out for however are the cheaper than usual introductory rates offered by some lenders along with no guarantee that the cheap rate will revert to the lenders standard rate at the finish of the introductory term.
Introductory rates are invariably variable interest rates and as such no iron clad guarantee can ever be given about the future as nobody knows for certain where interest rates will be at any time down the track. Many mortgages with low interest rates sound good until you take a close look at the fees and charges section. Study the fine print closely to make sure you fully understand exactly what you will finish up paying as many home loans can have you paying more in fees and charges than what you will be saving with the lower rate.
Being your first mortgage, you may not be fully conversant of exactly how interest rates operate. Make sure you make yourself interest rate literate before embarking of such an important financial journey and the best way of doing this is to work closely with a mortgage broker.
How Important is a Mortgage Broker?
Many home buyers only come to realise how important a mortgage broker is in the home loan industry when it comes to trying to clean up the mess left after taking out an unsuitable mortgage in the first instance. Mortgage brokers are the experts who make their living out of matching home loans to specific home buyers, all with different needs and outlooks for the future.
A mortgage broker will listen to you as you explain your present financial position, your plans for the future, your career opportunities and your marital situation in regards to you getting married and plans to start a family. All these matters are important in taking out your first mortgage as you will be paying the mortgage off throughout all these happenings and if anything was to go wrong, such as losing your job, becoming injured or ill, or if one partner has to leave the workforce, you home loan will need to be flexible enough to take it all in its stride.
Your mortgage broker will be able to sift through all the home loans available and to come up with one that best suits your particular circumstances. Your mortgage broker will help you make your home loan application as well as your First Home Owners Grant application, both of which can be quite daunting for the inexperienced. Your mortgage broker will remain by your side right through to settlement and beyond to make certain that your mortgage is always performing in your best interests.
How Important is a Budget?
A properly adhered to budget is always important in anything to do with financing. You will most certainly need a good workable budget to assist you in putting together the deposit to enable you to take out your first mortgage and it will be amazing how it all comes together if you stick to your budget religiously. Your potential lender will be looking for proof that you are able to save money from your present earnings as he will for proof of your financial discipline, the ability to leave your savings intact over a long period of time. A budget will also show you how much you are able to repay in home loan instalments and therefore what your borrowing limit will be. It is important to not over-borrow and a budget will protect you from such excess. A budget will also help your mortgage broker assess your borrowing limitations.
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- Compare Home Loans In Australia
- Beat Home Loans Fixed Loan
- Australian Home Loans
- ANZ Three Year Fixed Rate Home Loan
- CUA Fixed Rate home loans
- Cheapest Home Loans
- Buyer Beware: Have you been Fooled by Teaser Rates?
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