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Date Published : Tuesday, April 01, 2008
A tightening of the mortgage market - as a result of the recent credit crunch - means that many Australian first-time buyers are finding it hard to get on to the property ladder.
Since the global markets were hit by the collapse of the US sub-prime sector last spring, a number of Australia-based lenders have withdrawn mortgage products which were affordable to first-time buyers.
As a result, people looking to buy their first home are becoming increasingly concerned that they cannot afford, or get access to, a home loan.
A recent study by the Melbourne Business School found that many of the lenders which support first-time buyers - including Adelaide Bank, Bendigo Bank and Aussie Home Loans - may struggle to afford to lend to any homeowners if the current crisis continues for a sustained period of time.
First-time buyers need to know exactly what they can do to get a mortgage. Every lender is different but as a general rule of thumb, most lenders will offer owner-occupiers up to 95 per cent of the total purchase price.
Some loans are designed to cover the full purchase price, however these loans often come with limitations, higher fees or additional conditions attached, so always remember to read the fine print.
Homebuyers need to know how much you can borrow.Most lenders offer a pre-approval service in which buyers can find out exactly how much they can borrow, even before you begin your search.
Compare loan deals.
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