first home buyers
Affordability
With so much to think about it is easy to get ahead of yourself, thinking about location and property type... DON'T
The place to start is: Can you afford it? Generally, you are restricted by two things; the deposit amount you have to contribute and your ability to meet the repayments on an ongoing basis.
Your repayment ability is critical. Don't be concerned about whether the lender thinks you can afford it, leave that to us. You should focus on whether you feel comfortable in your ability to meet the loan repayments now and in the future.
Prepare a household budget as it would be, including mortgage repayments for the loan size you want. Remember to take into account all living expenses, including rates, insurances (both household and personal), entertainment, potential emergencies and holidays.
These are all real items that will occur and you need to ensure that when they do you can still meet the repayments on your home loan.
While every lender is different in establishing their affordability criteria, as a rough guide you can apply the one third rule. Your total monthly loan repayments, including any personal loan or credit card payments, should not exceed one third of your gross monthly income (before tax). The amount you can borrow and hence spend on a property will dictate the property style and location.
Our advice is to obtain a
pre-approval for a home loan before you start house shopping
pre-approval for a home loan before you start house shopping
