How much can you borrow?

Before you start looking at property it is important to understand how much you can borrow. This varies depending on how much you earn and what your living expenses are. FXB Finance brokers can do some basic calculations to help you understand how much you can afford to borrow.

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We can also arrange pre-approval for you so that you can shop with confidence. Pre-approval is the first stage in the loan application process.

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Government Fees & Purchase Costs

There are upfront costs that cannot be avoided (e.g. stamp duty) and these costs can be as high as 5.5% of the purchase price! 

Other upfront costs may include:

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• Transfer Fees

• Mortgage Application Fees

• Mortgage Registration Fees

• Conveyancer Costs

• Lenders Mortgage Insurance (LMI)

• Inspection Fees

• Moving Costs

 

Lenders Mortgage Insurance (LMI)

When you borrow more than 80% of the value of the property you may have to pay Lenders Mortgage Insurance. This is a once off cost and can generally be added to the loan amount and paid over the term of the loan.

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How much deposit will you need?

As a general rule of thumb, you will need a minimum 10% of the value of the property which includes 5% deposit plus 5% to cover purchase costs including stamp duty.

Aside from savings, your deposit can also come from the following:

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First Home Owners Grant

The First Home Owners Grant (FHOG) varies from state to state, however, in South Australia the grant for eligible first home buyers is $15,000 for new homes only.

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Family Guarantee

If you have family members that would like to help you with your new home purchase they can do this in two ways:

• They can gift some money to you to increase your deposit amount.

• They can offer up the equity in a property that they own as security for the required deposit amount.

This can be a great option as it means that you can often avoid the cost of LMI and save money. 

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Deposit Bond

A deposit bond acts as a substitute for the cash deposit required when purchasing a property. It allows a buyer to pay a deposit (up to 10% of the purchase price) using the deposit bond instead of using cash.

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With house prices rising you may not be able to buy in the suburb you want to live in. We can help you put a strategy in place and help you to determine whether you should buy an investment property or a house to live in first. 

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We can help you to work out the best loan for your situation. Below are common loan types available:

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Interest only or Principal and Interest

Interest only loans are as the name suggests, interest only, meaning that repayments are based on paying the interest on the loan and nothing off the principal. This may work well if the house you are buying will be an investment property at some time in the future. If, however, you are buying a home to live in and plan to live there long term then principal and interest payments are a great way to ensure you pay down your debt faster.

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Offset Account

An offset account is a transaction account linked to a home loan. The balance of the offset account is taken off the total principal remaining on the loan for interest calculation. For example, if you had a home loan of $150,000 and you had $20,000 in your offset account, the interest payable on your home loan would be calculated on $130,000. Effectively, this reduces the amount of interest charged over the life of the loan. To get the most out of an offset account, it is important to keep us much money in the account as possible.

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We will manage the process and work with your conveyancer to ensure that the process is as smooth and easy as possible for you so that you can focus on getting yourself ready to move into your new home.

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There can be lots of reasons for upgrading your home. Your family might have outgrown the space, you may want to renovate or extend, live in a different location to be closer to schools or work, or you might just want to move up the property ladder. Whatever the reason, FXB Finance can help you find the right loan to make your next home dream a reality.

 

We can help you bridge the gap

At FXB Finance, we understand that it isn’t always practical to sell one property before purchasing another. That’s where Bridging Finance can help. We can arrange bridging finance which will allow you to buy or build a new home before you sell your existing home.

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A bridging loan works in a similar way to a standard home loan. The best part about a bridging loan is that you will not have to make loan repayments on this loan whilst you are in the process of selling your old house, helping you to manage your cash flow during the selling process.

 

We can help you:

• Take the stress out of buying or building your first home

• Calculate your borrowing power and explore how to improve it

• Find the loan that best suits your situation