Sarah: Buying a home is a huge step.
Most people have an idea of what type of house they want to buy, but they might not have
a clear idea of the costs involved in purchasing a property, and how much they'll need to pay
upfront.
Hi guys, it's Sarah from Lendi, Australia's number one online home loan platform, where
we've already helped thousands of Australians get a home loan.
Watch this video where we break down the seven key things you need to know about saving a
deposit for a home loan.
Sarah: Now, before we start, if you want great home loan tips in Australia please subscribe
to our channel, and don't forget to hit the bell to be notified when we upload new videos.
Number one, how much can you afford to pay each month?
This is the first and most important question you will need to ask yourself as it informs
how much you can borrow.
In order to be approved for a home loan, lenders need to know that you have a steady income,
and the means to repay your loan in full.
Sarah: Number two, how much will your house cost?
The purchase price can depend on a number of factors.
For example, how big is your property, and where is it located?
Typically, the better the neighborhood the more expensive it is to buy as there's a lot
more competition.
For more information on how to determine the value of a property, you can watch our YouTube
video here.
Sarah: Number three, how much deposit do you need?
Borrowers typically aim to have a 20% deposit of the purchase price.
However, this is not a realistic option for many borrowers.
This target of 20% is set by lenders who view borrowers with less than 20% deposit a higher
risk.
This will then incur a fee which is LMI.
For more information on LMI or lenders mortgage insurance, you can check out our YouTube video
here.
There are in fact a lot of low deposit home loan options available, and for first home
buyers, this can be a way they get a foothold on the property ladder as the property prices
continue to grow.
Sarah: Number four, will you need to pay stamp duty?
Stamp duty is a one off government fee that you may need to pay when you purchase land
or property.
There are government concessions and exceptions that may be available to you, and they vary
between each state and territory.
For example, in new South Wales the First Home Buyers Assistance Scheme allows first
timers exemption on properties purchased up to $650,000.
Sarah: Number five, are there hidden costs?
When purchasing a property the deposit isn't the only cash that you'll need to hand over.
You'll need to have some money set aside for things like stamp duty, legal fees, building
and pest inspections, LMI, just to name a few.
For more information on the hidden costs of home loans, you can check out our YouTube video
here.
Number six, what is your borrowing power?
Your borrowing power refers to how much money you'll be able to borrow from a lender.
Your borrowing power will depend on a number of factors; your lender's policy, credit history,
your income, and your financial situation.
For more information on borrowing power, and how it's determined, you can check out our YouTube
video here.
Sarah: Number seven, what about your credit score?
Your lender will always conduct a credit check at the start of a home loan application process.
Your credit score will determine the risk that you are to that lender.
Try to pay off any existing debts to present less of a risk, and therefore, you may be
offered a lower interest rate.
Stable income and employment history will also improve your chances of a home loan approval.
For more information on credit scores and how that may impact a home loan application,
you can check out our YouTube video here.
That's it guys, everything you need to know about deposits and how much is required to
buy a house.
Sarah: Now remember, buying a property for the first time is a big decision, so making
sure that your finances are in order and that you've done the research to find the right
property are essential.
If you're ready to jump on the property ladder, let Lendi take the hassle out of the home
loan process for you, and help you find the right deal for your individual needs.
Now, if you're looking for more tips, you can join our Home Loan Hacks Australia Facebook
group, where we answer anything, all things home loans.
Sarah: Finally, if you found this video helpful please give us a thumbs up.
If you have any questions leave them in the comment section below.
If you want more information on other relevant home loan topics, you can check out our videos
here.
See you next time.