I'm a single parent of 2 teenage kids and have never owned a home.
I would like to know the best way of going about this?
Thank you

Hi Emma,
The first step is to understand your current financial position and your borrowing capacity. This is made up of the deposit you can contribute and your uncommitted monthly income.
The amount that is left over each month after paying all of your bills, any loans or credit cards and your general living expenses will determine how much you can afford to pay on a loan.
I would recommend you sit with a broker who can assist you with these calculations and give you a realistic target to aim for.
If you would like to talk further please get in touch through our website
Regards
Scott Howell
www.mobilelender.com.au
Scott.howell@mobilelender.com.au

Hi Emma

That's a great question and there are a few stages to buying your first home. The good news is that it's not that hard if you know what they are and have someone to help you!

The first step is to get a realistic understanding of what you can afford to buy, so that you can know with confidence that you will be comfortable with your loan once you buy the property. In order to find this out, the best way is probably to sit with a mortgage broker who can work through this with you.

There are two main things that define how much a bank will lend you. The first is the value of the property that you are buying, and the other is what you can afford to repay. A bank might be prepared to lend you say 95% of the value of the property, which means that you would generally need to have saved up the 5% as a deposit. You will also need to have saved up enough money to cover some other costs, like stamp duty and the legal costs of the settlement.

The second (and probably more important) consideration is how much you can afford to pay. You will need to work out how much spare income you can afford to pay, and then we can calculate how much loan you can afford to get (and therefore how expensive a property you can afford to buy). It's really important that this is done properly, as you want to ensure that you are comfortable with your loan and you can sleep at night!

After these two things have been worked out, the process basically looks like this:

1. Apply for a pre-approval through your broker with a bank. This means that the bank is basically happy with your loan scenario and you as a customer;
2. Start looking around for a property of the relevant value (as well as being what you like);
3. Make an offer on the property. We would then apply to the bank to get the final full approval;
4. Sign the contract for the property; and
5. The property "settles" - which basically means your deposit and the bank loan is paid to the owner of the house, and it becomes yours.

It's all pretty easy once you know how it works.

We'd be delighted to assist you at MortgageDirect if you liked. There is no cost from MortgageDirect for the service. Please feel free to contact us through here if you would like to touch base (we also have webchat online now on our website if you want to talk to us through that).

Good luck!
Dean

Dean Gillespie CertIV BEc MFin
mortgagedirect.com.au