Buying your first home is something many Aussies dream about, but it’s also a big commitment. In fact, it takes the average Aussie over 4 years to save a house deposit. Before sealing the deal, take a look at this 7-question checklist to help figure out if you’re ready to take the plunge.
Buying a home will likely be one of the biggest money moves you make, so don’t let FOMO, media hype or loved ones make the decision for you. Ultimately, you’re the one calling it home (and paying the bills!) so make sure you’re 100% ready to buy.
It depends on the type of property you want, but to get a loan you’ll need a certain amount of the home’s value for a deposit, usually around 20%. This could change depending on the type of loan and the lender, but if the amount you want to borrow is more than 80%, you might need to pay Lenders Mortgage Insurance (LMI). This cost will be on top of stamp duty, conveyancing fees and any condition reports you need to buy. However, UBank doesn’t require LMI on mortgages with an 85% loan to value ratio for approved owner-occupier loans paying principal and interest or interest only (subject to eligibility criteria).
Once you’ve saved the deposit, it’s time to consider if you can afford the ongoing mortgage costs. If you choose a variable rate home loan, the amount you pay each month might change if interest rates bounce around. Making sure you have breathing room in your budget could help avoid financial stress.
Pro tip: Check out our home loan calculators to run the numbers and see how much your repayments could be.
On top of the monthly payments, there could be other things you have to cover like moving costs. Plus, it’s a bright idea to consider any ongoing maintenance like replacing lights and fixing fences.
From broken windows to burst pipes and even busted door handles, sometimes repairs are needed out of the blue. Having an emergency fund is a great safety net so you’re prepared for those unexpected costs.
Pro tip: Need somewhere to stash your cash for a rainy day? Take a look at our USave savings account which lets you earn bonus interest on up to 10 accounts when you link it to a USpend transaction account and meet the qualification criteria.*
When it comes to finding the perfect home, everyone has their must-haves. It could be extra bedrooms and local schools for a growing family, or an outdoor area for that furry friend. Whatever the situation, make sure your budget can flex to meet your needs.
Unless there’s a crystal ball handy, you’ll need to think about where you see yourself in five, 10 or even 15 years – many home loans are for 30 year terms! If you want to kickstart a business, switch states or invest that moolah elsewhere, buying a home might not be top of the to-do list.
Becoming a homeowner is a big deal, so making sure you’re ready is key. After reading our checklist, do you still want to buy a house? If it’s a yes, take a look at our competitive interest rates and start your home loan application today.
* To qualify for the bonus variable interest rate on eligible amounts in your USave account(s) in a calendar month, you must have both a USave and USpend account and deposit $200 or more into your USpend transaction account or your linked USave savings account from non-UBank accounts during the same month. The bonus variable interest rate will be applied to a combined balance of up to $250,000 held in your USave account(s), including joint accounts. Any remaining balance greater than $250,000 will earn the USave base variable rate. Bonus interest is earned the same month you meet the bonus interest criteria and paid by the first day of the following month.
We recommend that you read and consider the Terms and Conditions for Transaction Accounts, the Terms and Conditions for Savings Accounts and our Financial Services Guide before making any decision. Target Market Determinations for these products are available at ubank.com.au/tmd. The issuer is UBank, a division of National Australia Bank Ltd ABN 12 004 044 937.
The information contained in this article is of a general nature only. It doesn’t take account of any person’s objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your circumstances and seek independent legal, financial, and taxation advice.