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Moving from renting a home to owning a home

Why Rent

Making the move from renting to buying your own home can be a really exciting time. It allows you to say goodbye to having a landlord, house inspections and changes to your housing situation at the whim of the property owner. Instead of paying off someone else’s mortgage and asset, you can start paying off your own asset and have freedom to do what you like with your home. These are just a few of the positives of owning a home verse renting.

While an exciting time, buying a home is one of the biggest financial commitments and investments most of us will make in our lifetime. With such a big commitment, there are a lot of things to consider before buying. Here’s a look at some of the most important things you’ll need to do and consider when making the move to home ownership.

Work out what you can afford

Before you can begin looking at properties and visualising your dream home, you’ll need to work out what you can realistically afford. You can use an online mortgage calculator to figure out how much you can borrow based on the amount you can afford to pay back. Once you’re armed with this information, take a look at property prices in the area you’re interested in buying in – perhaps you won’t need to borrow as much as you can afford, or you may find you need to adjust the sort of property you intend to buy based on what you can borrow.

If you’re a first home buyer, you may be eligible for a first home owner’s grant which you can factor in to your purchasing power as well.

New expenses to consider

When you’re working out the mortgage payments you can afford, you’ll also need to take into consideration the additional costs that come with owning a home that you don’t have to worry about when you rent.

The regular costs you’ll need to factor into your budget include Council rates, body corporate fees (if you buy an apartment or townhouse) and house insurance. You’ll also need to consider that you’ll be responsible for general repairs and maintenance on the house. While there’s no hard and fast figure on how much you’ll need for repairs and maintenance, there is a popular rule of thumb to budget for 1% of the price of the property. As an example, if you purchase a property for $300,000, you’d budget around $3,000 per year for repairs and maintenance.

Save a deposit

Basically the larger deposit you have when you’re purchasing a home the better. Generally you should aim to have at least a 20% deposit plus enough extra to cover purchase costs such as stamp duty and legal fees.

Not only does having a good deposit mean you have to borrow less, and therefore pay interest on less money, but it is also looked at favourably by lenders. If you need to borrow more than 80% of the purchase price of the property, your lender will more than likely charge you lenders mortgage insurance which can be several thousand dollars. This insurance is to protect the lender in the event that you default on your mortgage.

Choosing a home loan

Gone are the days of just getting your home loan through your regular bank; there are many different home loans available from various lenders and shopping around can really pay off. Finding a home loan and lender that suits your circumstances could potentially save you thousands of dollars.

Among the various lenders and home loan products out there, you’ll find different repayment structures, interest rates, fees and features. There are many online comparison tools to help you get an overview of the different loans, or if you don’t want to do the shopping around yourself, a licensed mortgage broker can help to explain the different options and help find the right loan for you.

Making the move from renting to owning a home involves a lot of research and planning, but the more you prepare the better you can set yourself up for success.

Lend Me – Car & Home Loan Brokers – Perth, Western Australia

How we've helped our clients...

"Starting up a new business isn’t easy, with so many things to think about it can be quite a stressful process. With the services of Lend Me Asset Finance and Locate Me, they have really helped to take this stress away in the way of meeting me on my job sites to sign documents and dealing directly with the Car Dealers, Bobcat Dealers and even my accountant.

The guys at Lend Me really do take the time to listen to what you are after and work in to suit you and make the transaction so simple and convenient, I can’t thank them enough! I’ve also recommended their services to 3 friends already and have only had good feedback. Lend Me have certainly gained a client for life! Reece"

"Hi there, Saturday just gone, I picked up my dream car, a 2013 black lancer LX.

I'd like to take this chance to say Lend Me Car Loan customer service was by the far the best I have ever received. What I thought was going to be tough work turned out to be the opposite. The process easy, simple and quick for me, she did the hard yards... I will be recommending friends and family... Thanks again! Regards, Stephanie"

I just wanted to say thank you... This has been the smoothest process. You and the other girls I dealt with at Lend Me Home Loans were so friendly and so efficient with everything, I felt like I was the only customer you were dealing with.

I will definitely be raving on to loads of people about Lend Me and the great service you provide.

I am stoked, this will take so much pressure off and will seriously change our lives... we can actually get ahead on payments and start saving some more money.

Thanks again, Kath :)

"Emily & I just want to take this opportunity to say a very big thank you for seeing us through our first home purchase and home loan, you have been a massive help not to mention getting us out of a sticky situation. We will definitely be in touch in the near future and will refer/recommend you to our family & friends if looking out for a friendly, helpful and reliable mortgage broker.

Take care and speak soon. Matt & Emily" 

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