FAQs Home Buyer Loans

How much can I borrow if I am first-time home buyer?

This is a very common question that most homebuyers who are buying a home for the first time typically ask. The loan amount you can borrow is determined by an individual’s capacity to borrow. When you approach a lender as a first-time homebuyer, the lender will take stock of your income, expenses, the tenure you want the loan for and how much you can repay every month. The best possible interest rates are applied and accordingly, the loan amount is determined. So, it is important before you plan on buying a home, streamline your finances, expenses and take care of any debts, personal loans etc. So, you can get the best loan offer.

How much should I have as down payment when buying a home?

The down payment is dependent on a couple aspects. This would be how old the house is, whether it is a new or old home, the asking price for the house, the earning capacity of the borrower, the duration of the home loan and more. Generally, an initial down payment or deposit of 20% must be put down by the borrower. In addition, certain costs accrued, and insurance may also have to be paid for.

Want to know more about LMI- Lender’s Mortgage Insurance?

It is good to be aware of the different acronyms and processes when you are planning on buying a home. You will come across LMI- Lender’s Mortgage Insurance. It is very common. LMI is applied when you put down less than 20% of the down payment or deposit. This insurance acts as a protection for the lender, in the event you are not able to keep up the monthly home loan repayments.

What are the costs that you must be aware of when buying a house?

It is good to know upfront what are the costs when you buy a house.

Some of the costs that you must consider when buying a house include:

-LMI
-Legal fees
-Stamp duty
-Loan application charges
-Building inspection service
-Insurance
-Applying for utility connections

But again, the charges and costs to purchase a home or property would vary by the state and the lenders you are engaging. Before you go with any lending company, always check with a few providers and speak to a couple brokers and understand the different charges, how it is applied and they type of loan and other related information.