House Hunting

After 15 months here in Australia as a migrant, me and my wife, like anyone else are dreaming and looking forward to buy our very own house. Prices of a basic house with 3 to 4 bedrooms range from A$290,000.00 to A$350,000.00. Monthly repayments range from A$1,800.00 to A$2,400.00 on a 30 year plan. Most of the banks requires 10 to 20% downpayment. I would suggest to go for 20% downpayment not only because it could lower down your repayments but you can also save heaps of money by not paying the Lenders Mortgage Insurance (LMI). It is an insurance to offset losses of the bank when a borrower is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. The premium payments for this insurance range from A$500 and could get as high as A$10,000 plus depending how low your deposit could get. It's basically for banks/lenders' security. So why would you spend such amount if you could pay off 20% deposit?

Australia New Zealand Bank (ANZ) and some other banks could also help with the processing of your First Home Buyers Grant if you are entitled to. Government grants range from A$8,000 to A$12,000 depending which state you're in. This grant is very helpful for those who are just starting.

Now if you're in a tight budget, you can buy a 2nd hand property about 4 to 5 years old with 3 to 4 bedrooms for A$220,000 to A$240.000 in Melbourne which is really not bad at all. Monthly repayments should be somewhere A$1,600 to A$1,800 depending on the interest rate. I reckon that its also practical to leave an allowance of at least A$100 per month for the fluctuation of interest rates if you are computing how much based on your earnings and expenses, you are able to pay for monthly repayment on a home loan.

You can google for properties and estimated montly repayments at http://domain.com.au/ and http://www.realestate.com.au/