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Buying a property, wether it is an apartment or a house, is pretty daunting.
"Deciding to buy" will get you prepared with valuable information on financial
and legal matters.
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What’s my Monthly Home Loan Budget?



Before you apply for a home loan you need to work out a weekly or monthly budget that shows the difference between what you earn and what you spend, so you will have a clearer picture of what type of home you can afford.

Click here for easy-to-use online budget template and loan calculators.

Your Home Deposits and Savings History



If you are a first home buyer, one of the most common questions is, ‘How much deposit will I need for my first home?’

Generally, the deposit required to secure a property is 10 per cent of the purchase price of the property. But with regards to financing your purchase, if you want to avoid lenders mortgage insurance you will need a deposit of 20 per cent of the purchase price. It is probably most cost-effective to come up with 20 per cent of the loan deposit.

Australian house prices have risen significantly over the past decade and many people feel they are always playing catch-up, trying to save 10 per cent or even 20 per cent of a home’s purchase price. If you are paying rent it can be even harder to save for a deposit but your home loan consultant understands that everyone’s financial situation is different, and there are a wide variety of home loans which are specially tailored to suit your financial circumstances.

Home Deposit Bonds


Home buyers who don’t have a cash deposit at the time of exchange may be able to use a home deposit bond. It is a guarantee that acts as an interim substitute for a cash deposit, meaning the payment of the deposit can be made at the time of settlement rather than immediately upon purchase. They are usually issued by an insurance company or other financial institution. The buyer must then pay 100 per cent of the purchase price on completion of the sale.

Deposit bonds can be issued for all or part of a deposit but are usually for 10 per cent of the purchase price of the property and cost about 1.2 per cent of the deposit. For example, if a 10 per cent deposit on a $500,000 property is $50,000, a deposit bond will cost you about $600.

The bond is legal, but it is up to the vendor whether to accept one or not. Numerous banks and home lenders can arrange for a deposit bond, including RAMS Home Loans, check this out: RAMS Deposit Power Guarantee. This may provide a low-cost, flexible option if your money is tied up, but you will need to be able to pay the full purchase price at settlement time. It’s particularly useful if you are looking to buy a property at auction.

Savings History


Many lending institutions today are flexible about savings history when considering if you qualify for a home loan. Depending on the mortgage you are after, you may not need any savings at all or, on some loans, you may not need to provide evidence of genuine savings – a gift from a family member might suffice. A responsible lender is more interested in making sure you can afford the mortgage repayments now and into the future than looking at your past 10 years of bank statements.
  
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