\n <\/a><\/a>\n <\/p>\n<\/div>\n\n\n\n Buying property is one of the most important financial decisions that a person is likely to make, and yet a lot of us don\u2019t understand how the process works. It can be complex and costly, but it can bring long-term financial and physical stability to a person\u2019s life.<\/p>\n\n\n\n So whether you\u2019re considering taking out a home loan or you already have one, on this page learn about home loans and find out where you can go for help if you need it.<\/p>\n\n\n\n When buying a house or apartment, people usually take out a loan to cover the cost of the property. This is referred to as a \u2018home loan\u2019. <\/p>\n\n\n\n You may have also heard of a \u2018mortgage\u2019. A \u2018mortgage\u2019 is an agreement between parties, usually, the person taking out the loan to buy a home and the lender. This agreement states that the borrower only owns the house \u2018outright\u2019 when the home loan is paid off. <\/p>\n\n\n\n If the loan can\u2019t be paid off for any reason, the lender can repossess the property. However, repossession is an action of absolute last resort and is strictly regulated by law.<\/p>\n\n\n\n Rather than owing money on a bill, a fine, or many other types of debt, mortgages are often viewed positively, or at least as a necessity, by many people. This is because the debt has been taken out to secure an asset that could give long-term security \u2013 a place to live and a property that could increase in value. <\/p>\n\n\n\n Owning a home has been central to what some call the \u2018Australian Dream\u2019. Unfortunately, in recent decades, increasing property prices occurring at the same time as slow wage growth has pushed that dream out of the reach of many people.<\/p>\n\n\n\n This page is specifically about home loans, but for more general information on buying a home, visit Moneysmart\u2019s steps to buy a home<\/a>.<\/p>\n\n\n\n Home loan providers include banks, building societies and credit unions. You can choose to apply for a loan directly with a lender of your choice, or you can work with a mortgage broker. <\/p>\n\n\n\n Mortgage brokers find and fill in applications for home loans on behalf of their clients. They typically negotiate with multiple lenders. It\u2019s important to remember that mortgage brokers may work on commission, and might take money to offer a specific range of loan products and lenders.<\/p>\n\n\n\n Visit Moneysmart\u2019s page on using a mortgage broker<\/a> for more.<\/p>\n\n\n\n Home loans usually require a deposit of a portion of the whole value of the property, including expenses to buy the property. So, if your deposit is 20% of the cost, the bank would cover the other 80% through the loan. <\/p>\n\n\n\n Once the deposit has been paid, the mortgage is then set for a repayment period, for example 30 years.<\/p>\n\n\n\n With deposits of less than 20%, you may need to pay Lenders Mortgage Insurance. This is insurance that covers the lender should the borrower default on the loan. The borrower pays the LMI, usually by having it added to the borrowed amount.<\/p>\n\n\n\n Once you\u2019re serious about buying property, one of your key priorities is to save for a deposit. Your deposit must take into consideration not only the down payment on the property, but the other buyer costs such as:<\/p>\n\n\n\n Read about grants, concessions, services and costs like stamp duty in your state or territory at the Australian Government\u2019s First Home Owner website<\/a>.<\/p>\n\n\n\n Read about saving for a deposit at the Moneysmart website<\/a>.<\/p>\n\n\n\n The lender decides how much they are willing to lend to you by looking at things like your income and financial commitments, as well as your current savings and credit history.<\/p>\n\n\n\n Take the bigger picture into account when considering a loan offer; like your regular living expenses and whether you can afford to repay the loan while still living comfortably. Remember, you don\u2019t have to say yes to the amount you\u2019re offered. You may be able to discuss more workable options with your lender. <\/p>\n\n\n\n There are a few different types of home loan products on the market, and each has advantages and disadvantages, depending on your individual needs. These include:<\/p>\n\n\n\n See the Moneysmart website<\/a> for help with choosing a home loan and to learn more about the advantages and disadvantages of some home loan features.<\/p>\n\n\n\n You may have seen comparison websites for things like home loans, credit cards, insurance or superannuation funds. These sites offer explanations of products, customer reviews and ratings, and price comparisons. They can also help you to decide what\u2019s best for you. Though before you act on any recommendation, it\u2019s important to know how comparison websites work. <\/p>\n\n\n\n Before committing to anything, it helps to stop and understand what it means to enter into a home loan. Many people do this by seeking financial advice from a variety of sources, including speaking with a financial adviser. <\/p>\n\n\n\n Financial advisers must have an Australian Financial Services Licence. They are also regulated<\/a> by the Australian Government. <\/p>\n\n\n\n What to expect from financial advice<\/a><\/p>\n\n\n\n How to check if a financial adviser is accredited <\/a><\/p>\n\n\n\n Considerations when choosing a financial adviser<\/a><\/p>\n\n\n\n If you have problems with a financial advice<\/a><\/p>\n\n\n\n Lenders and mortgage brokers might also offer financial advice. Remember that lenders are selling a product and mortgage brokers work on commission. So, before making a decision, you might want to go to a variety of sources. <\/p>\n\n\n\n 📌 See our loans and debt<\/a> page<\/strong>.<\/p>\n\n\n\n Use Moneysmart\u2019s mortgage calculator <\/a>to see how much repayments could be, read about the six ways to pay off a mortgage early<\/a>, and see how to switch a mortgage <\/a>from one lender to another. <\/p>\n\n\n\n There are laws and regulations that protect people who enter financial arrangements with banks, other organisations, and other people. It\u2019s important to know your rights and where to get help if you need it. You can visit the National Debt Helpline<\/a> for details. <\/p>\n\n\n\n Mortgage stress has a few different definitions. To put it simply \u2013 if you\u2019re struggling to pay your mortgage while keeping up with other life expenses, you might say you\u2019re experiencing mortgage stress. Even if this isn\u2019t an issue for you right now, an unexpected expense could be all it takes for you to experience mortgage stress.<\/p>\n\n\n\n While it may not feel like it, there are options available that may ease the pressure. Long before your lender sends a repossession notice or you decide to sell your property, possible options might include:<\/p>\n\n\n\n 📌 See our understanding superannuation<\/a> page<\/strong>.<\/p>\n\n\n\nHome loans and mortgages<\/h2>\n\n\n\n
Where to get a home loan<\/h2>\n\n\n\n
Mortgage brokers<\/h3>\n\n\n\n
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<\/figure>\n\n\n\nHome loan deposits<\/h2>\n\n\n\n
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Lenders Mortgage Insurance (LMI)<\/h3>\n\n\n\n
Budgeting for deposits and repayments<\/h2>\n\n\n\n
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How much to borrow<\/h2>\n\n\n\n
Types of home loan<\/h2>\n\n\n\n
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Using comparison sites<\/h2>\n\n\n\n
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Getting upfront financial advice<\/h2>\n\n\n\n
Financial advisers<\/h3>\n\n\n\n
Resources from Moneysmart<\/h4>\n\n\n\n
Advice from lenders and mortgage brokers<\/h3>\n\n\n\n
Related resources for managing your home loan<\/h4>\n\n\n\n
Know your rights <\/h2>\n\n\n\n
Help with mortgage stress<\/h2>\n\n\n\n
What you can do about mortgage stress<\/h3>\n\n\n\n
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Learn more about managing mortgage stress<\/h3>\n\n\n\n