While times have changed, the issues for first home buyers remain the same and have for many years.
We often hear people talk about the three biggest hurdles – deposit, income and existing debt. In many ways these are obvious, but they are also the reasons that a bank might use to say “NO” when you want a home loan.
So let’s look at these in a bit more detail:
Deposit – the bigger your deposit, the less you have to borrow but there are some other advantages with having a larger deposit and especially if you can start with more than 20% deposit. Low deposit home loans are referred to as being those home loans where the borrowers (you) have less than 20% deposit, and for these low deposit home loans there are extra rules and restrictions that make getting them harder.
Income – of course everyone wants a higher income and people always believe that the extra money will solve all their financial issues too. More income might mean you can save more and it also means that you can afford to borrow more, so getting extra income or a part time job can really help first home buyers.
Debt – it’s easy to get debt and while you might be fine with paying off your credit cards, store cards, hire purchase and/or a car loan they all require a part of your income to pay those repayments and this leaves less available for the home loan.
These all make sense … they’re obvious.
Your main issue should be how you overcome this and buy a home before they get priced beyond what you can afford.
That means seeking good advice.
