Q: What are the factors to consider to know if low deposit home loan is right for you?
A:
- Your savings and income
While a low deposit home loan can help you get into the property market sooner, it’s important to assess whether you can comfortably afford the repayments. Before applying for a low deposit home loan, consider your savings, income, and ongoing expenses to ensure that you can comfortably afford the mortgage repayments.
- Additional costs
Low deposit home loans often come with additional costs, such as Lenders Mortgage Insurance (LMI) and higher interest rates. It’s important to factor these costs into your budget when considering a low deposit home loan.
- Future financial goals
When considering a low deposit home loan, it’s important to think about your future financial goals. If you have other significant financial goals, such as saving for retirement or starting a business, a low deposit home loan may not be the right option for you. Consider whether the additional costs associated with a low deposit home loan may impact your ability to achieve these goals.
- Government schemes
The Australian government offers a range of schemes to help first-home buyers enter the property market. If you’re eligible for one of these schemes, it could make a low deposit home loan a more viable option for you. Some of these schemes include the First Home Loan Deposit Scheme, the HomeBuilder scheme, and the First Home Owner Grant.
