Understanding Home Loans in Ashburton: A Comprehensive Guide

The Ashburton Property Market

Ashburton's property market has been steadily growing, reflecting the overall trend seen in Melbourne's suburbs. The appeal of Ashburton lies in its community feel, excellent schools, and convenient public transport links. As of the latest data, the median house price in Ashburton hovers around $1.6 million, while units average approximately $900,000. Understanding these figures is crucial as they directly impact the amount you may need to borrow and the repayments you can afford.

Types of Home Loans Available

Fixed-Rate Home Loans

Fixed-rate loans offer stability with set interest rates for a specified period, typically ranging from one to five years. This option is ideal for borrowers wanting to budget with certainty, especially in a fluctuating market.

Variable-Rate Home Loans

Variable rates can change in response to the Reserve Bank of Australia's (RBA) cash rate adjustments. These loans often provide more flexibility, such as additional repayment options and redraw facilities.

Split Loans

A split loan offers the best of both worlds by dividing your loan into fixed and variable components. This can provide both the predictability of fixed rates and the flexibility of variable rates.

Practical Tips for Securing a Home Loan

Assess Your Financial Health

Before approaching a lender, evaluate your financial situation. Calculate your income, expenses, and any existing debts. Use online calculators to estimate your borrowing capacity and ensure you have a clear understanding of your credit score, as this will impact your loan terms.

Save for a Sufficient Deposit

While a 20% deposit is ideal to avoid Lenders Mortgage Insurance (LMI), many lenders offer options for deposits as low as 5%. However, the higher your deposit, the more favourable your loan terms will be.

Get Pre-Approval

Securing pre-approval not only strengthens your position as a buyer but also gives you a clearer idea of your purchasing power. Be aware that pre-approval is typically valid for three to six months.

Common Mistakes to Avoid

Overextending Financially

One common pitfall is borrowing to your maximum capacity without considering potential interest rate rises or life changes. Ensure that your budget has room for unforeseen expenses.

Ignoring Additional Costs

Beyond the property price, consider other costs like stamp duty, conveyancing fees, and moving expenses. Ignoring these could stretch your finances thin.

Not Shopping Around

Lenders offer varying rates and fees. Failing to compare these can result in higher costs over the life of your loan. Consider using a mortgage broker like Esteb and Co, who can access a wide range of lenders on your behalf.

How Esteb and Co Can Help

At Esteb and Co, we understand the intricacies of the Ashburton property market and the home loan process. Our team of experienced brokers can provide tailored advice to match your individual needs and circumstances. We work closely with a variety of lenders to find competitive rates and terms that suit your financial goals, helping you navigate the home loan process with confidence.