Getting your first home loan

Buying your first home will likely be the biggest and most important purchase you will ever make. It can be a very stressful and may even leave you sleepless for nights on end wondering whether you are making the right decision - especially where choosing the right home loan is concerned.

With all the other questions that tug at first time home buyers, the question of finding their deposit and obtaining the right mortgage are probably the ones that claim the most attention.

There are a number of different resources that first time homebuyers can consult in order to find some guidance; from financial institutions, government offices, books and the internet there is wealth of information just waiting to be had. However, there are a few things that first time home buyers should keep in mind when shopping around for the right home loan.

Determine just how much house you can comfortably afford. There are online calculators that can help you get a general estimate of what a lender might give you.

However, you should also consider your existing debt, your living expenses and closing costs when trying to establish what your budget should be.

Get your deposit together and find out if you are eligible for the First Time Home Buyer's grant offered to people who have never purchase or owned a home or property. You may check this on governmental website - http://www.firsthome.gov.au.

You should try to get at least ten percent of your projected budget's price as a deposit if you want to avoid paying lender's insurance on top of your mortgage.

First time home buyers should not feel pressured into making any snap decisions by lenders who use scare tactics to frighten them. Instead, they should shop around to find out what the current interest rates are, who is offering the best deals and just how flexible are the terms.

You should never sign anything without first understanding your mortgage agreement. Find out if there are any penalties for extra payments.

Find out how the interest on the loan is calculated. If you have chosen a variable loan find out the length of each adjustment period. Find out how much of your monthly payments will be covering the interest and how much will go towards the capital.

As long as you do your research and find out as much as you can before making any decision, you can take much of the stress and worry out of this very important time in your life.