Home Loan Aussie

By: EconomyWatch Content   Date: 26 November 2009

About The Author

EconomyWatch Content

Follow The Money

EconomyWatch, Content Team

 

  • Dot Div
  •      

The Australian real estate industry plays a significant role in the nation’s economy. According to an industry report by IBIS World, the industry generated staggering revenue of $ 8,915.5 million in 2008 alone. The Aussie home loan industry is a key factor for this favorable industry scenario.

Banks and financial institutions in Australia offer a multitude of housing finance products to cater to the varied needs of individuals. Of these, the first home owners’ loan has become very popular in the country. A housing finance report by the Australian Bureau of Statistics indicates significant increase in the percentage of loans applied for, by first home owners. It rose from 24.7% in August 2009 to 26.1% in September 2009.

Home Loan Aussie: First Home Buyers’ No Deposit and No Document Loans

The first home buyers often have a tough time in furnishing sufficient evidentiary documents for obtaining a home loan. Also, while applying for traditional home loans, a borrower is required to make a deposit. This is generally around five percent of the total principal value of the home loan. A first home buyer may not have sufficient finances to qualify for such loans.

A no deposit, no documentation loan is apt for those who are investing in their first house. Flexible terms of such loans enable individuals to borrow on the full value of the purchase price. In some cases, the lenders may provide loans worth more than the property’s purchasing price. The aim is to cover legal expenses like home registration and stamp duty.

A first home buyers’ loan, like other Aussie home loans, has its limitations that must be carefully examined. The most important shortcoming of such loans is that they tend to have higher interest rates. The low amount of documentation and the absence of safety deposit increase the risk borne by lenders. So, the interest rate is set higher to compensate for this. A first home buyer’s loan may also be subject to additional fees in the form of applications and processing fees.

Finally, an individual considering a first home buyer’s Aussie home loan must bear in mind that such loans have stricter approval criteria.

Also, certain properties do not qualify for these loans.


  • Dot Div
  •      

Most Popular in Home Loans

Related Links
blog comments powered by Disqus