How to find out if you're on track to buy a home
As interest rates and inflation continue to rise, many everyday Aussies are worried their dreams of home ownership slowly slip away.
But before you count yourself out of the property market, it's worth speaking to a lender to find out where you stand.
They can tell you if you're on the right track, or what you need to improve.
Credit score check
A credit score is one of the main ways a lender can check whether you are in good financial health and are ready to take on a home loan.
Most lenders will be able to provide you with a copy of your credit report, which includes a credit score, for free every three months.
The credit rating comes in the form of a "band" that your credit score sits in. This ranges between low, fair, good, very good, and excellent.
Lenders and credit reporting agencies can calculate your credit score based on what is in your credit report, which includes the amount of money you have borrowed, the number of credit applications you have made, and whether you pay on time each pay cycle.
Crash course on home loans
With so many home loans available, your lender should be able to explain the different types of loans and which is better suited to your personal circumstances.
The types of loans on offer in Australia include:
- Construction loans
- Line of credit loans
- Bad credit mortgages
- Low doc home loans
- SMSF loans
- Bridging loans
- Split rate loans
- Land loans
Get a handle on your budget
When interest rates and inflation rise, budgeting becomes an essential tool to harness. Luckily, most lenders can provide you with a few tips and tricks on how to budget more efficiently in order to better manage your finances and be on track to meeting your home ownership goals.
While budgets might not always seem appealing, they can help you to organise how much money is coming in, what's coming out, and what you need to have in the kitty for your house deposit and home loan repayments.
Guide to first home buyer grants
If you've never owned a home before, your lender will be able to run you through a few government funds and benefits you may be entitled to and able to use to your advantage.
The Labor Government has recently introduced the Help to Buy Scheme, which aims to assist individuals earning up to $90,000 (and couples earning up to $120,000) buy a property by covering up to 30% of the purchase price for existing properties and up to 40% for new builds.
Beyond this, there are plenty of options available that you can ask your lender whether you are eligible for including:
- First Home Owner Grant
- First Home Guarantee
- Family Home Guarantee
- Regional Home Guarantee
- First Home Super Saver Scheme
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