With all the turmoil in the world share markets in recent weeks, and real concerns over many countries sovereign debt, fixed mortgage interest rates have started to fall with some banks and lenders. In many cases a 3 year fixed rate home loan is a fair bit cheaper than the discounted variable rate mortgages the banks and lenders are offering.
There is even talk of the Reserve Bank Of Australia possibly dropping the official cash rate, which currently stands at 4.75%. Let’s hope if this happens, the banks and lenders pass on the full rate cut the RBA might pass (there may be a few rate cuts, if the world economies cant get there debt levels under control). There are certainly some genuine concerns about some of the biggest economies in the world at the moment. Australia though, at this stage, is in a good position fiscally, with our banks very healthy, and the demand for our resources still remaining strong.
In the past couple of years, generally speaking the banks and lender’s haven’t passed the full rate cut at times, they have increased there margins, stating that whole sale funding costs have increased. A lot of our banks and lenders in Australia borrow money from overseas to fund mortgages, and since the global financial crisis, there has been more reluctance from banks to lend to one another, hence the higher costs of borrowing (a basic explanation).
Now with fixed rates falling, and in some cases cheaper than the discounted variable rate, should you fix your home loan?
It may be a good time to consider fixing your home loan, or fixing part of your home loan. There are pro’s and con’s to fixing your mortgage.
Some of the pro’s are –
•You might have a cheaper interest rate than your variable loan
•You know that at least for the fixed interest rate period, how much your repayments are
Some of the con’s are –
•If the reserve bank does drop rates, you maybe paying more with your fixed rate home loan
•Generally most banks only allow a certain amount extra to be paid off with a fixed rate mortgage, if you pay more than what your lender allows, you may get charged extra fees
•You may not be able to have an offset account with a fixed rate home loan.
•Exit fees can be very high, if you pay off your fixed rate home loan, before the end your fixed rate period.
There are 2 very good articles I have written, in terms of fixed rate mortgages. They are worth a read, to learn more able the pro’s and con’s of a fixed rate mortgage –
1.What are the exit fees on a fixed rate mortgage?
2.Fixed rate home loans.
Have a read of these articles, and think what maybe better for your personal financial situation. A talk to a qualified mortgage broker, is a good place to start too, to help decide what is best for your personal needs.
If you have any questions or comments, please leave below. If you would like more personal mortgage information, please contact me anytime.
Saturday, August 20, 2011
Tuesday, August 2, 2011
The RBA Keeps Interest Rates On hold.
The RBA Keeps Interest Rates On hold?
Some great news for mortgage holders today, as The Reserve Bank of Australia kept the official cash rate on hold, at 4.75%. There had been high speculation that the RBA may increase the official cash rate today, but thankfully mortgage holders have been spared a rate rise.
There is still an expectation that the RBA may increase the cash rate in the coming months, but they look like they are taking a wait and see approach, as there is still a fair bit of uncertainty with both European and American public finances.
Credit growth in Australia has declined in recent months, and low by historical standards. House prices too, have also softened over recent months, and with a few other factors, may have helped the RBA decide to keep rates on hold. I personally think this is a great decision for us all.
The official statement from Glenn Stevens, Governor: Monetary Policy Decision: -
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.
The global economy is continuing its expansion, but the pace of growth slowed in the June quarter. The supply-chain disruptions from the Japanese earthquake and the dampening effects of high commodity prices on income and spending in major countries both contributed to the slowing. It is still not clear how persistent this slower growth will be. The supply-chain disruptions are now gradually abating and commodity prices have softened of late, though they generally remain high. In China most indications suggest only a mild slowdown so far.
The central scenario for the world economy over the next couple of years envisaged by most forecasters remains one of growth below the pace of 2010, but at or above long-term averages. Downside risks have increased, however, as concerns have grown over the outlook for the public finances of both Europe and the United States.
Australia's terms of trade are now at very high levels and national income has been growing strongly. Investment in the resources sector is picking up very strongly and some related service sectors are enjoying better than average conditions. But in other sectors, cautious behaviour by households and the high level of the exchange rate are having a noticeable dampening effect. The impetus from earlier Australian Government spending programs is now also abating, as had been intended.
The resumption of coal production continues, but a full recovery of flood-affected production now looks unlikely before early next year. Precautionary behaviour by households also looks likely to keep some areas of demand weaker in the near term than earlier expected. Overall, growth in real GDP through 2011 is now likely to be at about trend. Over the medium term, overall growth is still likely to be at trend or higher, unless the world economy deteriorates noticeably.
Growth in employment has moderated and the unemployment rate has been little changed, near 5 per cent, for some time now. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn, though productivity growth remains weak.
Year-ended CPI inflation has been high, affected by the extreme weather events earlier in the year. As these effects reverse over the next couple of quarters, CPI inflation should decline. But measures that give a better indication of the trend in inflation have begun to rise over the past six months, after declining for the previous two years. While they have, to date, remained consistent with the 2–3 per cent target on a year-ended basis, the Board remains concerned about the medium-term outlook for inflation.
It is appropriate under such circumstances for monetary policy to exert a degree of restraint. Most financial indicators suggest that it has been doing so, as a result of the Board's decisions last year. Credit growth has declined over recent months and is very subdued by historical standards, even with evidence of greater willingness to lend. Most asset prices, including housing prices, have also softened over recent months. The exchange rate is high. Each of these variables is affected by other factors as well, but together they point to financial conditions being tighter than normal.
At today's meeting, the Board considered whether the recent information warranted further policy tightening. On balance, the Board judged that it was prudent to maintain the current setting of monetary policy, particularly in view of the acute sense of uncertainty in global financial markets over recent weeks. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation.
If you have any questions or comments, please leave below. If you would like to contact a mortgage broker, please contact me anytime. I work the Perth metro area.
Some great news for mortgage holders today, as The Reserve Bank of Australia kept the official cash rate on hold, at 4.75%. There had been high speculation that the RBA may increase the official cash rate today, but thankfully mortgage holders have been spared a rate rise.
There is still an expectation that the RBA may increase the cash rate in the coming months, but they look like they are taking a wait and see approach, as there is still a fair bit of uncertainty with both European and American public finances.
Credit growth in Australia has declined in recent months, and low by historical standards. House prices too, have also softened over recent months, and with a few other factors, may have helped the RBA decide to keep rates on hold. I personally think this is a great decision for us all.
The official statement from Glenn Stevens, Governor: Monetary Policy Decision: -
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.
The global economy is continuing its expansion, but the pace of growth slowed in the June quarter. The supply-chain disruptions from the Japanese earthquake and the dampening effects of high commodity prices on income and spending in major countries both contributed to the slowing. It is still not clear how persistent this slower growth will be. The supply-chain disruptions are now gradually abating and commodity prices have softened of late, though they generally remain high. In China most indications suggest only a mild slowdown so far.
The central scenario for the world economy over the next couple of years envisaged by most forecasters remains one of growth below the pace of 2010, but at or above long-term averages. Downside risks have increased, however, as concerns have grown over the outlook for the public finances of both Europe and the United States.
Australia's terms of trade are now at very high levels and national income has been growing strongly. Investment in the resources sector is picking up very strongly and some related service sectors are enjoying better than average conditions. But in other sectors, cautious behaviour by households and the high level of the exchange rate are having a noticeable dampening effect. The impetus from earlier Australian Government spending programs is now also abating, as had been intended.
The resumption of coal production continues, but a full recovery of flood-affected production now looks unlikely before early next year. Precautionary behaviour by households also looks likely to keep some areas of demand weaker in the near term than earlier expected. Overall, growth in real GDP through 2011 is now likely to be at about trend. Over the medium term, overall growth is still likely to be at trend or higher, unless the world economy deteriorates noticeably.
Growth in employment has moderated and the unemployment rate has been little changed, near 5 per cent, for some time now. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn, though productivity growth remains weak.
Year-ended CPI inflation has been high, affected by the extreme weather events earlier in the year. As these effects reverse over the next couple of quarters, CPI inflation should decline. But measures that give a better indication of the trend in inflation have begun to rise over the past six months, after declining for the previous two years. While they have, to date, remained consistent with the 2–3 per cent target on a year-ended basis, the Board remains concerned about the medium-term outlook for inflation.
It is appropriate under such circumstances for monetary policy to exert a degree of restraint. Most financial indicators suggest that it has been doing so, as a result of the Board's decisions last year. Credit growth has declined over recent months and is very subdued by historical standards, even with evidence of greater willingness to lend. Most asset prices, including housing prices, have also softened over recent months. The exchange rate is high. Each of these variables is affected by other factors as well, but together they point to financial conditions being tighter than normal.
At today's meeting, the Board considered whether the recent information warranted further policy tightening. On balance, the Board judged that it was prudent to maintain the current setting of monetary policy, particularly in view of the acute sense of uncertainty in global financial markets over recent weeks. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation.
If you have any questions or comments, please leave below. If you would like to contact a mortgage broker, please contact me anytime. I work the Perth metro area.
Saturday, July 30, 2011
How Much Deposit Do I Need To Buy A $475,000 Home In Western Australia?
How Much Deposit Do I Need To Buy A $475,000 Home?
Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.
Lets look at how much deposit you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $475,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($475,000 Property).
Property Purchase Price - $475,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $479,650 (Including The Fees)
Deposit Required $23,750 (5% of $475,000)
You will need $23,750 deposit, as a first home buyer to purchase a property costing $475,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $475,000 in Western Australia –
Purchase price (including fees) - $479,650
Minus Your Deposit - $23,750
Minus The First Home Owners Grant - $7,000
Home Loan Required $448,900
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $475,000 property, with a $448,900 home loan, the mortgage insurance fee would be approximately $14,316 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $448,900
+
Mortgage Insurance Fee $14,316
Total Home Loan $463,216
Your approx repayments on a $463,216 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,112.96 per month,
Buying Your Next Home Or Investment Property ($475,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $475,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $475,000
Transfer Stamp Duty - $16,578
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $496,228 (Including The Fees)
Deposit Required $23,750 (5% of $475,000)
Plus Fees (as above) $21,228
Total Deposit Required $44,978
You will need $44,978 deposit, as a non first home buyer to purchase a property costing $475,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $475,000 in Western Australia –
Purchase price (including fees) - $496,228
Minus Your Deposit - $44,978
Home Loan Required - $451,250
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $475,000 property, with a $451,250 home loan, the mortgage insurance fee would be approximately $14,391 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $451,250
+
Mortgage Insurance Fee $14,391
Total Home Loan $465,641
Your approx repayments on a $465,641 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,129.26 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $475,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, Western Australia, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.
Lets look at how much deposit you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $475,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($475,000 Property).
Property Purchase Price - $475,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $479,650 (Including The Fees)
Deposit Required $23,750 (5% of $475,000)
You will need $23,750 deposit, as a first home buyer to purchase a property costing $475,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $475,000 in Western Australia –
Purchase price (including fees) - $479,650
Minus Your Deposit - $23,750
Minus The First Home Owners Grant - $7,000
Home Loan Required $448,900
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $475,000 property, with a $448,900 home loan, the mortgage insurance fee would be approximately $14,316 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $448,900
+
Mortgage Insurance Fee $14,316
Total Home Loan $463,216
Your approx repayments on a $463,216 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,112.96 per month,
Buying Your Next Home Or Investment Property ($475,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $475,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $475,000
Transfer Stamp Duty - $16,578
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $496,228 (Including The Fees)
Deposit Required $23,750 (5% of $475,000)
Plus Fees (as above) $21,228
Total Deposit Required $44,978
You will need $44,978 deposit, as a non first home buyer to purchase a property costing $475,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $475,000 in Western Australia –
Purchase price (including fees) - $496,228
Minus Your Deposit - $44,978
Home Loan Required - $451,250
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $475,000 property, with a $451,250 home loan, the mortgage insurance fee would be approximately $14,391 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $451,250
+
Mortgage Insurance Fee $14,391
Total Home Loan $465,641
Your approx repayments on a $465,641 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,129.26 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $475,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, Western Australia, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
Sunday, July 17, 2011
How Much Deposit Do I Need To Buy A $450,000 Home?
Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $450,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.
Lets look at how much deposit you need to purchase a $450,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $450,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($450,000 Property).
Property Purchase Price - $450,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,600 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $454,550 (Including The Fees)
Deposit Required $22,500 (5% of $450,000)
You will need $22,500 deposit, as a first home buyer to purchase a property costing $450,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $450,000 in Western Australia –
Purchase price (including fees) - $454,550
Minus Your Deposit - $22,500
Minus The First Home Owners Grant - $7,000
Home Loan Required $425,050
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $450,000 property, with a $425,050 home loan, the mortgage insurance fee would be approximately $13,555 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $425,050
+
Mortgage Insurance Fee $13,555
Total Home Loan $438,065
Your approx repayments on a $438,065 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,947.57 per month,
Buying Your Next Home Or Investment Property ($450,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $450,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $450,000
Transfer Stamp Duty - $15,390
Settlement Agent Fee - $1,600 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $469,940 (Including The Fees)
Deposit Required $22,500 (5% of $450,000)
Plus Fees (as above) $19,940
Total Deposit Required $42,440
You will need $32,440 deposit, as a non first home buyer to purchase a property costing $450,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $450,000 in Western Australia –
Purchase price (including fees) - $469,940
Minus Your Deposit - $42,440
Home Loan Required - $427,500
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $450,000 property, with a $427,500 home loan, the mortgage insurance fee would be approximately $13,634 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $427,500
+
Mortgage Insurance Fee $13,634
Total Home Loan $441,134
Your approx repayments on a $441,134 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,964.56 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $450,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, Western Australia, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
Lets look at how much deposit you need to purchase a $450,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $450,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($450,000 Property).
Property Purchase Price - $450,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,600 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $454,550 (Including The Fees)
Deposit Required $22,500 (5% of $450,000)
You will need $22,500 deposit, as a first home buyer to purchase a property costing $450,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $450,000 in Western Australia –
Purchase price (including fees) - $454,550
Minus Your Deposit - $22,500
Minus The First Home Owners Grant - $7,000
Home Loan Required $425,050
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $450,000 property, with a $425,050 home loan, the mortgage insurance fee would be approximately $13,555 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $425,050
+
Mortgage Insurance Fee $13,555
Total Home Loan $438,065
Your approx repayments on a $438,065 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,947.57 per month,
Buying Your Next Home Or Investment Property ($450,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $450,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $450,000
Transfer Stamp Duty - $15,390
Settlement Agent Fee - $1,600 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $469,940 (Including The Fees)
Deposit Required $22,500 (5% of $450,000)
Plus Fees (as above) $19,940
Total Deposit Required $42,440
You will need $32,440 deposit, as a non first home buyer to purchase a property costing $450,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $450,000 in Western Australia –
Purchase price (including fees) - $469,940
Minus Your Deposit - $42,440
Home Loan Required - $427,500
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $450,000 property, with a $427,500 home loan, the mortgage insurance fee would be approximately $13,634 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $427,500
+
Mortgage Insurance Fee $13,634
Total Home Loan $441,134
Your approx repayments on a $441,134 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,964.56 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $450,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, Western Australia, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
Sunday, July 3, 2011
Why Get Pre Approved Mortgage Finance?
This is an email question from Thom in West Leederville. His question asks – I am considering buying an investment property, and I am wondering whether I should get pre approved mortgage finance? What are the benefits if I do? And what cost is involved?
This is a good question, and one I get asked all the time. Ok, firstly lets look at what pre approved mortgage finance is.
With pre approved mortgage finance, you would generally meet you’re your mortgage broker, and learn how much you could borrow. Then once you have decided on how much your pre approved home loan will be, you will need all the paperwork required to get a home loan.
Most banks or lenders, with pre approved mortgage finance, check the paperwork, do a credit check, and then, hopefully pre approve your mortgage application. Also too with pre approved mortgage finance, the pre approved home loan limit, is an up to amount, so if you find a cheaper property, or don’t need to use the full pre approved home loan limit, then that is fine. For example, if you have a $400,000 pre approval in place, but only need a $250,000 home loan, then that is ok, as your limit you applied for was $400,000.
If you need more than your pre approved limit, provided you have talked to your mortgage broker beforehand, and have ascertained how much you can borrow, you should be ok to increase the pre approved amount, with your application.
Pre approved mortgage finance, with most banks and lenders generally has no cost, and the pre approval lasts on average for 3 months, with most lenders. It is important when you are speaking to your mortgage broker to know all the possible costs associated with any pre approval mortgage application.
If your pre approved mortgage finance expires, it still generally costs nothing with most banks and lenders, to apply for another pre approval.
There are many advantages to pre approved mortgage finance. Some advantages include –
You know how much you can borrow
You have the peace of mind knowing that you finance is pre approved.
A real estate agent may take your offer more seriously, knowing that you have pre-approved finance in place
The pre-approved finance may give you more negotiating power on the property you are thinking of purchasing, as your finance has been pre approved, giving the seller more confidence in your finance application.
Because you have a pre approval in place, most banks and lenders, will be quicker assessing your home loan application, as they have already done part of the work with your pre approval application.
A pre approved mortgage application doesn’t always mean that your home loan will be approved, once you have found a property. The bank or lender will still generally speaking value the property you have brought, re check your paperwork, and do employment checks. Generally speaking though, if your home loan has been pre approved, your formal finance application (when your find the property),. Should be more than likely approved.
If you have any comments, please leave below. If you would like more personal finance information, or to use my services as a mortgage broker, please contact me anytime.
This is a good question, and one I get asked all the time. Ok, firstly lets look at what pre approved mortgage finance is.
With pre approved mortgage finance, you would generally meet you’re your mortgage broker, and learn how much you could borrow. Then once you have decided on how much your pre approved home loan will be, you will need all the paperwork required to get a home loan.
Most banks or lenders, with pre approved mortgage finance, check the paperwork, do a credit check, and then, hopefully pre approve your mortgage application. Also too with pre approved mortgage finance, the pre approved home loan limit, is an up to amount, so if you find a cheaper property, or don’t need to use the full pre approved home loan limit, then that is fine. For example, if you have a $400,000 pre approval in place, but only need a $250,000 home loan, then that is ok, as your limit you applied for was $400,000.
If you need more than your pre approved limit, provided you have talked to your mortgage broker beforehand, and have ascertained how much you can borrow, you should be ok to increase the pre approved amount, with your application.
Pre approved mortgage finance, with most banks and lenders generally has no cost, and the pre approval lasts on average for 3 months, with most lenders. It is important when you are speaking to your mortgage broker to know all the possible costs associated with any pre approval mortgage application.
If your pre approved mortgage finance expires, it still generally costs nothing with most banks and lenders, to apply for another pre approval.
There are many advantages to pre approved mortgage finance. Some advantages include –
You know how much you can borrow
You have the peace of mind knowing that you finance is pre approved.
A real estate agent may take your offer more seriously, knowing that you have pre-approved finance in place
The pre-approved finance may give you more negotiating power on the property you are thinking of purchasing, as your finance has been pre approved, giving the seller more confidence in your finance application.
Because you have a pre approval in place, most banks and lenders, will be quicker assessing your home loan application, as they have already done part of the work with your pre approval application.
A pre approved mortgage application doesn’t always mean that your home loan will be approved, once you have found a property. The bank or lender will still generally speaking value the property you have brought, re check your paperwork, and do employment checks. Generally speaking though, if your home loan has been pre approved, your formal finance application (when your find the property),. Should be more than likely approved.
If you have any comments, please leave below. If you would like more personal finance information, or to use my services as a mortgage broker, please contact me anytime.
Sunday, June 26, 2011
Why Compare Your Mortgage?
This is an email question from Steve in Leederville. His question asks - I have had my home loan for a couple of years, and have noticed that some banks are offering cheaper interest rates. My question is, should I compare my home loan?
It is important to know what your home loan interest rates are. It is also important to know if you are paying monthly or annual fees, and the features that your current home loan has.
You may be able to save a fair bit of money too, if another or new home loan product has come to the market, and may suit your current needs better.
A call or email to a mortgage broker, may help you get through the maze of comparing your home loan. Mortgage Brokers are paid commissions by banks or lenders, and most mortgage broker do not charge a fee (I Don’t, if your not sure, just ask your broker).
A good mortgage broker, should compare your current home loan, to other products on offer, plus the possible costs associated with either switching your home loan with your current lender, or switching to another bank, versus the savings you may receive.
It really costs nothing to compare your home loan, just a little bit of your time. In the case with Steve, the email question, we were able to switch his home loan to a different mortgage with the bank he was with, saving any possible exit fees. Steve’s interest rate was reduced from 7.4% to 7.1% on his $300,000 home loan. His savings were approx $66 a month, which is quite a significant saving. The bank fee, to switch his loan was $300, so the fee to switch the loan, will be repaid within the first 5 months of starting his new home loan.
If you would like a home loan health check, or to speak to a qualified mortgage broker, please contact me anytime.
It is important to know what your home loan interest rates are. It is also important to know if you are paying monthly or annual fees, and the features that your current home loan has.
You may be able to save a fair bit of money too, if another or new home loan product has come to the market, and may suit your current needs better.
A call or email to a mortgage broker, may help you get through the maze of comparing your home loan. Mortgage Brokers are paid commissions by banks or lenders, and most mortgage broker do not charge a fee (I Don’t, if your not sure, just ask your broker).
A good mortgage broker, should compare your current home loan, to other products on offer, plus the possible costs associated with either switching your home loan with your current lender, or switching to another bank, versus the savings you may receive.
It really costs nothing to compare your home loan, just a little bit of your time. In the case with Steve, the email question, we were able to switch his home loan to a different mortgage with the bank he was with, saving any possible exit fees. Steve’s interest rate was reduced from 7.4% to 7.1% on his $300,000 home loan. His savings were approx $66 a month, which is quite a significant saving. The bank fee, to switch his loan was $300, so the fee to switch the loan, will be repaid within the first 5 months of starting his new home loan.
If you would like a home loan health check, or to speak to a qualified mortgage broker, please contact me anytime.
Monday, June 13, 2011
How Much Deposit Do I Need To Buy A $425,000 Home
How Much Deposit Do I Need To Buy A $425,000 Home.
Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $425,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.
Lets look at how much deposit you need to purchase a $425,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $425,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($425,000 Property).
Property Purchase Price - $425,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,550 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $429,600 (Including The Fees)
Deposit Required $21,250 (5% of $425,000)
You will need $21,250 deposit, as a first home buyer to purchase a property costing $425,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $425,000 in Western Australia –
Purchase price (including fees) - $429,600
Minus Your Deposit - $21,250
Minus The First Home Owners Grant - $7,000
Home Loan Required $401,350
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $425,000 property, with a $401,350 home loan, the mortgage insurance fee would be approximately $12,799 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $401,350
+
Mortgage Insurance Fee $12,799
Total Home Loan $414,149
Your approx repayments on a $414,149 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2783.21.48 per month,
Buying Your Next Home Or Investment Property ($425,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $425,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $425,000
Transfer Stamp Duty - $14,203
Settlement Agent Fee - $1,550 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $443,703 (Including The Fees)
Deposit Required $21,250 (5% of $425,000)
Plus Fees (as above) $18,703
Total Deposit Required $39,953
You will need $39,953 deposit, as a non first home buyer to purchase a property costing $425,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $425,000 in Western Australia –
Purchase price (including fees) - $443,703
Minus Your Deposit - $39,953
Home Loan Required - $403,750
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $425,000 property, with a $403,750 home loan, the mortgage insurance fee would be approximately $12,875 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $403,750
+
Mortgage Insurance Fee $12,875
Total Home Loan $416,625
Your approx repayments on a $416,625 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,799.85 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $425,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $425,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.
Lets look at how much deposit you need to purchase a $425,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.
Ok, lets look at fees, and the minimum deposit you will need to purchase a $425,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -
First Home Buyers ($425,000 Property).
Property Purchase Price - $425,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,550 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $429,600 (Including The Fees)
Deposit Required $21,250 (5% of $425,000)
You will need $21,250 deposit, as a first home buyer to purchase a property costing $425,000 in Western Australia.
To work out your how much your home loan would be, as a first home buyer purchasing your home for $425,000 in Western Australia –
Purchase price (including fees) - $429,600
Minus Your Deposit - $21,250
Minus The First Home Owners Grant - $7,000
Home Loan Required $401,350
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $425,000 property, with a $401,350 home loan, the mortgage insurance fee would be approximately $12,799 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $401,350
+
Mortgage Insurance Fee $12,799
Total Home Loan $414,149
Your approx repayments on a $414,149 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2783.21.48 per month,
Buying Your Next Home Or Investment Property ($425,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.
Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.
Lets look at how much deposit you will need to purchase a $425,000 property, if you are buying your next home or an investment property in Western Australia –
Property Purchase Price - $425,000
Transfer Stamp Duty - $14,203
Settlement Agent Fee - $1,550 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)
Total including Fees - $443,703 (Including The Fees)
Deposit Required $21,250 (5% of $425,000)
Plus Fees (as above) $18,703
Total Deposit Required $39,953
You will need $39,953 deposit, as a non first home buyer to purchase a property costing $425,000 in Western Australia.
To work out your how much your home loan would be, as a non first home buyer purchasing your home for $425,000 in Western Australia –
Purchase price (including fees) - $443,703
Minus Your Deposit - $39,953
Home Loan Required - $403,750
When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.
Based on purchasing a $425,000 property, with a $403,750 home loan, the mortgage insurance fee would be approximately $12,875 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -
Home Loan $403,750
+
Mortgage Insurance Fee $12,875
Total Home Loan $416,625
Your approx repayments on a $416,625 home loan over 30 years, at an average mortgage interest rate of 7.1% is $2,799.85 per month.
This is an approximate guide to how much deposit you will need to purchase a property costing $425,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.
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