eChoice's Top 10 Home Loan Tips for First Home Buyers

Many first-home buyers have little or no existing home buying knowledge and the majority are learning how to negotiate their way around dealing with real estate agents and with contracts for the first time, which, for many, can be a scary experience.

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(PRWEB) May 17, 2013

Many first-home buyers have little or no existing home buying knowledge and the majority are learning how to negotiate their way around dealing with real estate agents and with contracts for the first time, which, for many, can be a scary experience. With more than 50,000 first home buyers entering the market annually, eChoice, an award-winning independent financial service provider, is hoping to take the scare factor out of first home buying by making their top 10 home loan tips for first-home buyers public knowledge.

eChoice, a division of the Firstfolio Group, who has assisted over 32,000 Australians to find the right home loan for them since 1998, now manage more than $21 billion in loans. For many, including first-home buyers, this has made home ownership possible, even in uncertain financial times.

The top 10 home tips for first-home buyers, says eChoice, "will not only help these buyers to avoid costly mistakes, but will also help them to get more overall value out of the home buying experience."

eChoice's Top 10 First-Home Buying Home Loan Tips

To make finding the the right first home buyer loans easier, eChoice's top 10 tips are as follows:

1. Know the facts before you take out finance. Do market research. Educate yourself on loan terminology, the types of home loans that are available, and just what you will encounter. Be prepared and you'll get the best deal.

2. Know how much you can borrow. Rather than going to a lender and asking how much you can borrow, do your own calculations. Take control of your finances. Use a ‚Äéhome loan calculator to estimate what repayments are affordable and leave yourself with enough money to comfortably pay for everything without hardship.

3. Save a deposit to avoid paying Lender's Mortgage Insurance (LMI). When you borrow more than 80 percent of the value of a home, your lender will require you to take out LMI. LMI covers the lender for loan repayment default and is typically charged as a percentage of your loan value. It can be costly. To avoid paying LMI, save more.

4. Set yourself a budget. Know how much you can afford to borrow and how much you need to save as a deposit. Then set yourself a budget and stick to it. This will allow you to save what you want over your designated period, and you'll find making home loan repayments a lot easier because you have developed a good financial habit.

5. Compare home loan lenders. Banks, building societies, credit unions, and even insurance groups offer home loans. All have different lending criteria and offer different services. Find out who you feel more comfortable with, then look at their home loan products.

6. Compare home loan products. Standard and basic variable loans, fixed loans, principal and interest loans and principal only loans, as well as honeymoon or introductory loans are the most common loan types that you will encounter. All come with advantages and disadvantages, and some will cost you more than others.

7. Compare home loan terms. Don't assume that all lenders have the same lending terms and conditions. All vary. Some require you to have different documentation to secure the loan, varying eligibility criteria, specific payment requirements and terms dictating to payment default.

8. Know about fees and charges. Application and exit fees, fees to change home loan products, account keeping charges and transaction fees are just some that you may encounter. Some of these fees are small, others can be large.

9. Seek independent advice. If you are not sure, then ask. Contact a mortgage broker or financial expert that is not associated with the loan you're looking to take out and ask questions. Most financial professionals will assist you.

10. Find out if you're eligible for a first home buyer's grant. If you've never owned a home before, then you may be eligible for a first home buyer grant. Visit http://www.firsthome.gov.au/ now, it could possibly save you thousands.

To find out more about first-home buyer products? Then contact eChoice today.


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