7 lesser-known homeownership costs explained

You’ve done your sums, prepared your deposit, and completed a mortgage calculation. You know how much you can borrow, how much you’ll pay, and what will be left over for furniture, renovations, and a big blow-out house party.

The only thing left to do is make an offer and get your home, right? Not quite, as those home ownership costs are probably a lot steeper than you realise.

In this blog, we’ll look at 7 lesser-known homeowner costs, helping you to prepare for your big purchase.

Before we look at the home ownership costs that you aren’t expecting, let’s address the one that you are: the mortgage payment.

Every month, fortnight, or week, you make an agreed-upon mortgage payment with your lender. The payment constitutes the interest and the principal—interest-only mortgages are also available but principal and interest loans are more common.

The “principal” goes toward clearing the balance while the “interest” is what the bank charges to provide the loan.

Let’s assume that you have a $500,000 mortgage with a 5.5% interest rate and a 25-year term. Your repayments will be $3,070 a month and over the course of the 25 years, you’ll repay $921,131, $421,131 of which is interest. It sounds like a huge sum considering the relatively low-interest rate, but that’s because the 5.5% is charged annually, and 25 years is a long time.

To reduce the repayments and total interest, you can reduce the loan term or increase the monthly payment. Every month that you make a full repayment, you’re meeting your interest obligations. If you overpay anything, all the additional cash will go toward your principal.

In this case, an extra payment of just $100 a month will save you $31,537 in total interest. Increase it to $500 and you’ll save nearly $120,000.

Now that we’ve discussed the often-unexpected cost of interest, let’s address some other costs you might now know about.

5 Reasons to Work with a Local Sunshine Coast Mortgage Broker

In the fast-paced and constantly changing financial & real estate market, securing a mortgage can feel like an overwhelming task. Gone are the days of being able to walk into your local bank branch to apply for a home loan and walking out with an approval no questions asked.

With more options and choices available than ever before, but seemingly less support and understanding from finance providers around your own individual circumstances and needs, it’s no wonder people are struggling to figure out where to even start when looking at home finance.

That’s where Fox Home Loans, your local Sunshine Coast mortgage brokers come in! We are your local experts in all things home finance, with the insights and connections that can turn your home-buying journey into a seamless experience from start to finish. Discover the distinct advantages of choosing a Sunshine Coast Mortgage Broker like us and why local knowledge truly matters.

Overcoming Home Loan Challenges When Self-Employed: Your Comprehensive Guide

If you’re self-employed and searching for home finance, navigating the mortgage process can be stressful. Traditional lenders can take a more complicated view of self-employed applicants, which can lead to the process becoming challenging and sometimes discouraging. Let’s get into some of the common challenges self-employed individuals can face, as well as the solutions available to you that we can help you leverage, to make your home finance experience as easy and enjoyable as possible!

Does your income and cash flow fluctuate throughout the year, making it difficult to show steady income through traditional means? You’re not alone! This variability can often make financing through traditional banks and their products complicated due to their stricter policies around income verification.

However, some banks and lenders have specific products for business owners that consider variability in income and make this process much smoother by utilising a commonsense approach in their assessment.

In the fast-paced world of real estate, timing is everything. For homeowners looking to upgrade, downsize, or relocate, synchronising the sale of an existing property with the purchase of a new one can be a logistical nightmare. This is where bridging finance comes into play. Bridging finance, also known as a bridging loan, provides a temporary financial solution that enables homeowners to manage the transition between selling and buying properties. However, like any financial product, it comes with its own set of advantages and considerations that potential borrowers should carefully evaluate. It is important to weigh these factors thoroughly to make an informed decision that aligns with your financial goals and circumstances.

In this article, we will explore the pros and cons of bridging finance to help you determine if it’s the right option for your home loan needs.