Buying your First Home? First off, Congrats! Buying your first home is an exciting experience…. As long as you have the right team to help you along in your journey.
At Loan Monster, we’re here to help answer the tough questions and help you on this exciting journey! We’ve put together a few of our most commonly asked questions from first time homebuyers, so that you can be on the front foot and ready to start househunting with confidence.
Our Frequently Asked Questions from First Time Homebuyers
How much money will I be able to borrow for my First Home?
This is the most frequently asked question when it comes to purchasing your first home. The ‘technical’ term for this is your ‘borrowing capacity’.
At Loan Monster we will be able to analyze your details to understand what your borrowing capacity will be, everyone is different with individual situations, so it is best to chat with a Mortgage Broker before looking for a property.
The borrowing capacity is how much you can borrow and what you can comfortably afford when making your mortgage repayments. BE AWARE! When lenders make an assessment, they will generally apply a ‘buffer’ which means they will add anywhere between 2% – 4.5% generally as a margin above the quoted interest rate.
This allows for you to have certainty based on your current financial situation that you could still afford the repayments if rates increase in the future. A broker will walk you through all of this by examining your current living expenses & current liabilities and determining whether your current income will service this with an additional mortgage repayment.
What are considered living expenses?
These are your day to day expenses which can include but are not limited to the following list:
Utilities and rates
Transport expenses, Petrol, Registration, etc.
Clothing and Grooming
Insurances – eg. health, home contents, car
You would be surprised where your money goes when you see it written in front of you. Sometimes completing a budget can help to look at how to tighten things up to make owning your own home more affordable.