If you’re thinking buy or build your dream house, this is probably the best time to apply for a Home loan in Melbourne. There are now many reasons to go to a home loan specialist and speak your requirement as several changes have made it easier for the first home buyer to get a home loan quite easier.
Here are some upcoming changes that might support your home ownership goals.
Intesrest Rates Has Been Reduced
First time in almost three years, on 4th June 2019, the Reserve Bank of Australia (RBA) reduced its cash rate. Many leading economists are forecasting two 0.25% decreases this year one in June and one in August. Some are even predicting the third cut in November.
This, of course, doesn’t proactively mean that all banks will follow – or reduce your mortgage loan rate by the same amount. But as funding costs have eased in recent times, you can expect most lenders will pass on at least part of the 0.25% decrease to new borrowers.
Australian interest rates are already at low levels, so further decreases are taking us into new territory. For your home loan, this could mean several things:
- Affordability has never been better, meaning you may now be able to afford a home you couldn’t before.
- Establish good habits: for new homeowners it’s a great time to establish ‘good habits’ in managing the new home loan commitment while rates are at an extremely low level.
- Bank the savings: if your current rate does go down and you can afford to, it’s a great opportunity to increase your repayments above the minimum required to build up your equity (the difference between the home’s value and the amount you owe), which will provide a buffer for you at some stage should you need it. Plus, it will significantly reduce the amount of interest you end up paying the bank over the term of the loan.
The government made an election promise to support first home buyers. While details are still shallow, their proposal is to support up to 10,000 first home buyers who’ve saved at least a 5% deposit. The government is suggesting they’ll guarantee 15% of the purchase price, therefore eliminating the need for mortgage insurance, which could save the buyer up to $10,000.
At this stage, the incentive would be open to singles on an income up to $125,000 and couples on a combined income, up to $200,000. There will be property purchase caps depending upon regions, however this detail is yet to be determined.
Irrespective of the details that are yet to be determined, the good news from this announcement is that the Government is serious about initiatives to help first home buyers overcome the challenges of jumping on the property ladder.
For exceptional home loan services please feel free call Winning Wealth Finance at 0432 593 753