 Budget and save
Mortgage experts agree on simple advice that can save home owners thousands of dollars. Top of list is saving for a deposit and careful budgeting, no surprises there.
Some warn that there are sacrifices that have to be made in order to own your dream home. Kristy Sheppard, senior corporate affairs manager with Mortgage Choice says borrowers must plan a budget and stick to it.
Buying a property is usually the biggest, most expensive purchase of our lives, and a mortgage is a big commitment.
"You
need to realise that you will have to make sacrifices to achieve a goal
as large as being able to purchase a property," Ms Sheppard said.
Lending criteria now is much tougher than last year, and lenders are much more cautious about lending. Building a deposit is one of the best ways to ensure that your home loan application is greeted favourably by the lenders, and a great way of reducing the amount of interest you will pay over the life of the loan.
Ms Sheppard advises potential borrowers to try to save wherever they can. Examples include walking instead of driving or using public transport, making your own lunch at work, using discount vouchers and sales.
When applying for a mortgage, always factor in a 2 per cent interest rate hike, and use on line calculators to prepare forecasts and budgets. If you can afford the increases, then you are good to go. You can even consider repaying the loan at a higher amount, if your loan structure allows for extra repayments, as this reduces the principle faster and results in you paying less interest.
Financial
markets all predict interest rate rises by the end of this year, with more to follow into next year.
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