A deposit of at least 20% of the desired loan amount is required if you want to avoid paying Lenders Mortgage Insurance. However, many First Home Buyers are eligible for various government schemes that allow you to buy with a lower deposit.
Stamp Duty is a state tax that pays for the transfer of property from one owner to another. It is paid upfront and needs to be budgeted for, in addition to your loan deposit. Many First Home Buyers are eligible for grants that waive the cost of stamp duty.
Your borrowing capacity is usually calculated as your income minus your expenses or any debts (this includes credit card limits). You can use our calculators here but keep in mind these are only a guide for calculating your borrowing power.
Lenders mortgage insurance (LMI) is required when the value of a loan is more than 80% of a property’s purchase price, or property valuation if refinancing. A bank considers a loan to carry a higher risk if the Loan to Value Ratio (LVR) is above 80%, in which case LMI is payable.
Refinancing involves reviewing your current mortgage, and potentially swapping your loan to another lender, who can better meet your current needs.
There are costs involved with refinancing. Some of these costs involve: • Discharge fee • Mortgage registration fee • Settlement fee • Application fees
It is not advisable to manage your investment property. It might be tempting to do so to save money, but you may find yourself dealing with a lot. The benefits of a property manager include: • Saves you time. Not need to take time out of your day to organise repairs or interview hundreds of tenants • Having someone to oversee that the property is well-maintained • Ensures you are compliant with relevant rental laws