This is only a small house, but for the first house buyer, a house like this is probably the only house that they could afford.
Buying your own house
We have discussed several things already about buying a house, but what we have not discussed yet is how much of our own money we need; you see this is the crucial point that any buyer should really try to know before they buy a house or whatever piece of real estate they are trying to buy. The first thing you have to assume is that you need a good deposit to buy a house, if you have been able to save enough money and have a large sum of money for a deposit, then it is easy to buy and you will not get in financial troubles later on, but if you try to buy with a small deposit you might run the risk to lose the property that you have bought, because you might not be able to repay your loan. So, let us look at a few examples and try to compare them to see what is involved.
Today here in Australia and I believe in most of the western world that runs financial matters like we do here in Australia, to buy a house you can find help in the banks and other financial societies that specialize in giving loans to people to buy houses or any other sort of Real Estate, and even the first home buyer is welcome to use them, but there are rules that you have to follow to qualify for the loan and what does it involve. You see banks and financial societies need security, in other words they want to feel sure that you are able to pay them back their capital and also the interest that they will be charging on the loan.
Therefore for a first home buyer to have a large enough deposit is necessary, it would also be helpful that this money you have saved to buy your house, you have deposited in the bank or the financial society that you are using to apply for the home loan; you see if you have done that they already have the record of how much money you are able to save in a certain amount of time. Let us now try to put forward a few examples:
Let me start with the first loan that we used when we bought the first house. In those times the banks had very strict rules to follow; for the first home buyer they required that you had a deposit of about 25% of the cost of the house you were buying, and that the repayment were about ¼ of your wage that you took home, so in those times people usually were able to pay their loans, just because the banks had this strict rules to follow. But today they are willing to loan money more easily, so it is also up to you the buyers to work out if you can afford the loan repayments easily.
Therefore, because the lenders have relaxed a bit the lending rules, it is easier for the buyers to borrow a larger sum of money than they could have borrowed in the past, but this is not always helpful, because you can borrow more than what you would be able to pay the monthly mortgage when it becomes due; so buyers beware and don’t rely only on the lenders judgement, because after all the lender are there to lend you money, so that they can make more money for themselves; therefore it is important that you should work it out yourself several time before you get involved, because the banks have their own ways how to get their money back, if you fail to pay them back, as we will explain later on. Therefore, what should we be looking for if we want to borrow a loan that we can afford to pay back? We will explain in our next post a bit more how the average person could work it out; see you soon.
Menfranco general blog,
How much money
IS TO BE CONTINUED;
Next time with, Working how much to borrow
Some personal and religious links:
Some personal and religious links: