Is It A Good Idea To Loan For A Property In Australia?
The natural wonders and the man-made marvels in the progressive cities make Australia a very attractive place for real estate investment
. It?s not a surprise if more locals or foreigners will be enticed to invest in the said country in the years to come.
Australia has a program called First Home Owners Grant, which also has a big influence on the rise of the number of home buyers in past years.
Australia is also home to hundreds of trustworthy mortgage lenders, offering a wide array of loan programs. Lending firms are the most accessible financial helpers to first time home buyers, home builders, and property investors.
It is true that going to lending firm is an easy answer. But every borrower should put in mind that what matters is his capacity to pay the loan and his knowledge of the loan policies.
First off, there?s the Lender's Mortgage Insurance (LMI) or Private mortgage insurance (PMI). It is an insurance that shields the financial safety of the lender, but the premiums are ironically paid by you, the borrower. The amount of premiums to be paid monthly is dependent on the amount given as initial deposit. If the deposit is at least 20%, LMI is usually waived.
It is also important that you make your repayments on time every month. Pay the whole amount that is due for the month so that you won?t accumulate unwanted extra interests or penalties. If you think that partial monthly payments can still do you good, you?re wrong.
About refinancing, it is not such a bad idea at all. Going through very little paperwork all over again may just be the only drawback, but refinancing may prove to be beneficial, considering that a lot of lending firms are now trying to outdo one another in terms of interest rates and discounts due to stiff competition. If you stumble upon a better deal, go over the stipulations and make a decision.
There is an arrangement called Offset home loan offset. Yes, this arrangement enables the borrower to save. The interest that will be earned on the offset savings account can be paid to the principal loan. While it is true that this deal can provide savings, this can only serve well for those who pay their dues on a regular basis. If not handled properly, this arrangement can even lead to bigger payables.
Buying a property can be an exciting undertaking. But it is the buyer?s responsibility to take the initiative in learning laws, policies, and procedures when trying to purchase a property. In other words, investors will not be ripped if ignorance is out of the picture.
by: Seana Redbanka
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