Mortgage expert can help

Buying your first home can be very stressful.

Robert Projeski from Australian Mortgage Options said taking out a home loan was a big decision to make.

"It is always important to do your own research, as this is one of the biggest financial decisions you will make in your lifetime," Mr Projeski said. "Utilising the experience of a mortgage expert can give a prospective home buyer great opportunity to obtain advice and possibly reduce your monthly repayments and your loan term up by half."

Mr Projeski said first home owners with bad credit history should not stress about the past.

"Most lenders will require a deposit and there are options available for first time buyers who don't have a deposit," he said. "You will normally need to clearly demonstrate consistent savings over a period of time. You can still buy a home if you have bad credit but you will need a larger deposit or support from a family member or friend."

Most first time homeowners don't know how much to have saved for a deposit.

Mr Projeski said a general rule was 10 per cent of the property value.

"The more you have the better off you will be," he said. "Ideally 20 per cent is best to avoid mortgage insurance."

There are grants still available for first homebuyers including the First Home Owner Grant which offers first homeowners who purchase a new property up to $15,000 as well as no stamp duty to pay.

Property investors who purchase a new property could receive $5000.

In addition to mortgage repayments, Mr Projeski said there were other costs you needed to consider.

"When purchasing a property you could be required to pay mortgage registration, stamp duty solicitor costs and searches," he said. "The stamp duty alone on a $400,000 property is about $11,500 for an existing property. Other costs you will need to consider when budgeting for a new home after settlement include council rates, insurance and strata levies (if purchasing a unit or townhouse)."

■ When applying for a home loan, take six months proof of employment, a list of your assets and liabilities and any proof of previous loans that have been paid back.

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