Perth, Australia -- (ReleaseWire) -- 01/27/2014 -- New home lending is on the rise, according to the latest numbers from the Australian Bureau of Statistics (ABS), with loans for new dwellings up 1.9 percent, seasonally adjusted.
HIA Acting Regional Executive Director, Western Australia, John Gelavis noted, “New home lending has been gradually inching up over the past couple of years and today’s figures confirm that the upward trend is continuing.”
Savings are the first step to getting good terms on a home loan. Having a sizeable deposit not only can help avoid having to pay hefty Lenders Mortgage Insurance, but can increase chances of getting approved for a loan. The best time to start saving is now, as starting earlier means less impact on lifestyle.
2. Pay off Debts
Banks won’t lend as much to borrowers who have already accrued debt. Paying off debts, credit card balances and other liabilities evens out the score, immediately increasing the amount that can be borrowed. Getting squared away financially not only impacts the loan size but also improves credit history, making it easier to get approved.
3. Cash Only
A great way to control the daily budget is to take away credit cards and pay cash only. Paying with hard currency makes it clear how much is being spent each day, and having to physically withdraw money makes it more difficult to overspend.
4. Get Assistance
The WA Government wants more Australians in new property and is willing to pay. The First Home Owners Grant (FHOG) is now $10,000 for qualifying home buyers looking to purchase new homes. Stamp Duty exemptions for first home buyers is additional thousands of dollars available to qualifying Australians.
Many Australians aren’t aware that government backed home loans are available in WA. KeyStart Home Loans are targeted towards moderate income earners and offers low deposit home loans at great interest rates. These home loans are not subject to Lenders Mortgage Insurance (LMI), making them a great option for those who qualify.
6. Fix Rates
With interest rates lower than ever, home buyers are rejoicing. But will the low rates stay? Only time will tell, but one way to keep the bargain rates around for longer is to use a fixed rate home loan. Fixing the rate generally means a slightly higher initial rate compared to a variable home loan, but if rates go up, the fixed loan payments will stay the same, while the variable one will follow the market. Fixed loans usually go for 3 to 5 year terms.
Home loans have plenty of features these days, but not all of them are completely necessary. While having more flexibility in a mortgage is desirable, excess features that aren’t used just mean higher fees and rates. Instead of going for the whole kitchen sink, buyers can consider more basic home loans that offer simple but effective redraw facilities with extra repayments.
Paying a bit extra in months where there’s something left over creates a rainy day fund which can then be accessed through a redraw application. This kind of low cost setup offers a lot of bang for the buck.
About Aveling Homes
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Visit the Aveling Homes website at http://avelinghomes.com.au for more details about our services and available financing options for first time home buyers.
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