The amount you can borrow is generally commonly known as your borrowing capacity. Your borrowing capacity will differ from lender to lender, however we have the tools to advise you on this.
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation. Under the scheme, a one-off grant of up to $7000 is payable to first home owners that satisfy the eligibility criteria. If you are married or living in a de facto relationship, you must make a joint application for the grant with your spouse or de facto. Neither of you can have owned a home previously, whether individually or with any other person.
Essentially Lenders’ Mortgage Insurance gives you the opportunity to purchase a property with a smaller deposit, but this insurance provides protection to the lender. LMI premiums are payable by the borrower when the amount borrowed is above a certain percentage. Some lenders will allow you to add the LMI premium to your home loan; others require you to pay it up front
We highly recommend that you obtain a pre-approval before going to auction or buying off the plan. A pre-approval is similar to full finance approval except the final details of the property you purchase have not yet been determined. This ‘in principle approval’ is usually valid for 3 months and can be valid for up to 12 months so you can take your time to find the perfect place. Remember that the pre-approval is subject to the conditions under which it is approved, but it gives you a clear framework to work within.
An offset account is like a transaction (saving) account that can be linked to the loan. Instead of receiving interest on the offset account balance, those funds are 100% offset against the daily balance of you mortgage. For example, if you have an outstanding balance on your mortgage of $320,000 and you have $20,000 in your offset account, then you will pay interest only on $300,000 calculated daily instead of paying interest on the full $320,000.
