Ever feel lost in a sea of home loan information? CoreLogic’s Perceptions of Housing Affordability report revealed that Australians are misinformed about a number of aspects of the home buying process.
Are untruths keeping Australians from buying property? We debunk some common myths to help you understand more about buying a home.
Misunderstanding – you need a 20 per cent deposit
According to the survey, the number one impediment to housing affordability was having the deposit. Only 42 per cent of Australians surveyed were aware that banks would allow you to purchase property with less than a 20 per cent deposit.
What these people don’t realise is that with the range of home loans out there, you can get a loan with varying deposits or even with no deposit at all. With 35 per cent polling that they could afford a deposit up to 9 per cent, it’s clear that misunderstanding is the real deal breaker.
Misunderstanding- there aren’t grants and concessions for FHBs
The second greatest roadblock? Stamp duty – 44 per cent of those surveyed said stamp duty was a major impediment to affordability. Interestingly, only 49 per cent realised that some states offered stamp duty concessions to FHBs.
Many states do, in fact, offer different schemes that lift all or some of the stamp duty for eligible buyers. In most states, this means you’re an Australian citizen or permanent resident, who is over the age of 18 and who hasn’t previously owned property.
States also offer first home owners grants. Amounts and eligibility vary by state, but Australian FHBs across the country are entitled to a one-off grant to help get on the property ladder.
Misunderstanding – I’ll never be approved for a loan
Loan approval is also a major concern, with 38 per cent surveyed citing it is a major impediment to housing affordability.
Millennials – those aged 18-34 – are particularly worried about loan approval, with 41 per cent calling it one of their biggest impediments.
Young people are as capable of making mortgage repayments as anyone else.
Young people are new to the workforce, so they haven’t had as much time to save for a deposit. They also may not have built credit or are affected by bad credit due to burdensome student loans.
While it may be more difficult to get the right loan, millennials can benefit from working with the right mortgage broker who can help them navigate the lending process. We understand that young people are as capable of making mortgage repayments as anyone else.
Many of the myths Australians hold about housing affordability could be remedied with the right financial education. Could a lack of understanding be keeping you from realising your dreams of owning a home? The right mortgage broker can help. Speak to us today!