It’s the Australian dream to own your own home, and it’s a dream that millions of Australia are proactively working towards each and every day. Even though the property market is sky high, and your dream of owning your own home may seem unattainable, with the right advice and a tailored financial plan, we can help turn any dream into reality.
The first step in buying a home is to see if you qualify for an investment loan. Once you have established that you are eligible for a loan, you can determine how much you can borrow and whether you can afford the repayments.
There is always risk involved with reward; the key is finding an acceptable level of risk and a well structured financial plan that considers any curveballs that life may throw at you.
To qualify for a home loan, you need to have a sufficient deposit of at least 5%. You’ll also need at least 3-months of savings in your bank account, a clear credit history, and stable income and employment.
How much money you can borrow will depend on the lender, but it is generally between 85%-90% of the property value. There are many other associated fees, including Lenders Mortgage Insurance (LMI) if your deposit is under 20%, stamp duty, which can be as much as 6% of the property value, the valuation fee, transfer fee, legal fees and conveyancing costs, and loan fees.
To minimise the costs associated with buying a home, paying at least a 20% deposit means you don’t have to pay for Lenders Mortgage Insurance, which can be substantial.
Let’s look at the figures. The current median house price in the Gold Coast’s middle circle is $710.000. So, at 20%, a deposit of $142,000 would be required to avoid LMI. For houses in the inner circle, suburbs located less than 5km from the CBD, the median house price is $735,00, so a deposit of $147,000 would be required.
While this may seem like a lot of money to down pay, paying a 20% deposit will saving you a median LMI of $35,000 for houses in the Gold Coast’s middle circle and $38,000 for homes in the inner circle.
If you need help saving for a deposit, turn to the expert financial advisors at Centaur Financial Services or review the tips outlined on our I Want to Save for a Goal page to help you reach this goal. We have the experience needed to help you consolidate debts and devise a strategic plan to help you save your home deposit as quick as possible.
The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Centaur Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance.
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