Purchasing your own home is one of the things that most people grow up hoping to achieve one day. All of us want to have a property as an asset in our name. In addition to that, we all want to gift ourselves and our loved ones a well-deserved house where we can live and grow our own family.Home Loans
However, owning a home is not as easy as it sounds. It is a tremendous responsibility so no one should take it lightly. Hence, you need to do some research, evaluate your financial standing and consider other options (if needed) before making a decision. Or maybe, consider a home loan?
What is a home loan? Is it right for you? It is a type of loan provided by a bank, a mortgage company, or other financial institution for the purpose of buying a property for investment or residence. In a home loan, the owner of the property (the borrower) transfers the title to the lender on the condition that the title will be transferred back to the owner once the payment has been made and other terms of the mortgage have been met.
However, home loans come with pros and cons. Sure, this move has advantages as compared to buying a home. When you apply for a home loan, you have the freedom to budget and plan ahead. You become confident over your fixed loan period. Moreover, repayments don’t charge during the fixed rate term.
However, home loan is a long-term commitment. On average, the home loan usually lasts for 10-12 years. Over these years, the equated monthly instalment can impact your finances (considering the increasing inflation rate). Unless your salary increases, this can be difficult for many Western Australians. And if due to any unforeseen situations, you are not able to pay the monthly instalment, you will become a defaulter in the bank’s eyes.
So how do you choose a home loan? Read this: https://www.moneysmart.gov.au/borrowing-and-credit/home-loans/choosing-a-home-loan